Legacy loan management systems make the lending management process unduly tough for lending officers thanks to the large scale manual processes involved. Given the gradual increase in demand for credit, lending companies find it impossible to cope with the outdated loan management solutions that follow a fragmented approach. Financial lending companies need a solution that can omit out the need for tedious paperwork and can make the loan management process efficient and cost-effective at the same time.
This is where a loan management software comes to the rescue. It significantly improves the quality and turnaround time for the lenders and end-customers simultaneously.
Now, if you are wondering what features to look for in the perfect loan management software, here is what to expect.
11 Features of the Perfect Loan Management Software
Leveraging an all-in-one loan management software can result in multi-faceted benefits for a business, right from easing the workflow to improving overall customer experience. While there is no one superior product that is best suited for every lending company, the choice really depends on the particular needs of the business. Besides the operational efficiency and ease of use, here are the features of an ideal loan management system:
1. Scalable Support
Only a loan management system that can help a lending company grow and diversify its products and services would be a reasonable choice for the business. The lending software that caters to all the lending needs of the companies right from consumer loans, commercial loans, asset financing, and more should be the preferred choice due to its varied offerings and scaling capabilities. Any ideal lending management solution would account for a broad range of use cases and add value to the company.
2. Type of Deployment
A lending startup may lack a dedicated IT department to develop and manage an advanced lending software solution. In such a case, a cloud-based solution helps lenders deploy a fully flexible software system guaranteeing quick implementation. Lenders benefit from access to advanced features and functionality that cloud infrastructures promise. They also offer regular hassle-free maintenance, frequent upgrades along with prompt IT support.
3. Centralised Approach
The storage of data in multiple systems to cater to different stages of the loan lending lifecycle is a typical legacy trait. An ideal loan management software must store customer data in a centralised place for ease of retrieval. This provides a 360-degree view of the customer’s profile. A system that follows a centralised approach allows the entire loan department to have a holistic view of a loan applicant’s profile irrespective of who is handling the case. Thus, it streamlines the workflow.
4. Integrated Servicing Functionalities
Any software solution that offers an integrated overview of all the different processes of the lending lifecycle like customer onboarding, the credit assessment, loan disbursal, and loan repayment modules eases the burden off the shoulders of the lenders. Thus, a system that promises a suite of customisable modules that allow a comprehensive view and avoid the fragmentation of data becomes desirable for lenders.
5. Proprietary Credit Assessment
Modern lenders wish to use technologies that leverage data and derive insights from it. The ideal lending solution would be the one that comes integrated with all credit bureaus and other valid data points that help assess the creditworthiness of applicants. Solutions that stay updated with different credit bureau data and analyse unconventional data points like alternative data, including GSTN, social media input, along with generic bank statement analysis, are the top choices. The use of artificial intelligence, deep learning and machine learning technologies to continually provide efficiency adds to the solution’s credibility.
6. Robotic Process Automation
Automation improves operational efficiency at the lender’s end by easing the execution of multiple mundane tasks like evaluation, analysis, and other critical decisions that take up time. A sound loan management system speeds application submission, reduces human errors and optimizes loan approval time. While the foundation of software should always be lending industry best practices, it should also allow customizations based on its workflow.
7. Mobile-Friendly Ecosystem
Mobile application-based architectures facilitate lending in the digital era. A mobile-based lending application makes the process simpler for both the customer and the company. While the customers enjoy the convenience of handling their loan details from their phone, the company leverages as a medium to expand its outreach.
8. Analytical Capabilities
Perfect loan management software would generate analytical reports and present insights about bottlenecks, streamline the lending process, and improve overall productivity. In the long run, it would help the lenders oversee market trends and resolve problems that arise from them. A solution that offers scope for creating custom reports without manual labor and helps lenders assess their KPIs, customer acquisition and other strategic process-related metrics would be invaluable.
All lenders desire a seamless, transparent, and easy to deploy loan disbursal system to please their customers. Customers appreciate transparency along with speed so that they can access capital resources without any hassle. Such a tool would fortify the lending process to meet the expectation of the clients. The perfect loan management solutions keep the customers informed about the loan progress with quick creditworthiness assessment and credit disbursal.
10. Third-Party Integration Ability
A loan processing module that syncs with other systems like CRM or ERP is a winner when it comes to lending management. Further, a system that facilitates connection with remote sales personnel to update information and reach their targets becomes a hit with the lenders. Third-party applications can auto-populate information and save time on re-working, helping lenders streamline the process of loan disbursal.
11. Secured Services
New age cloud-based loan management systems boast of features like real-time sharing and data updation, automatic document creation, and more. However, lenders remain concerned about data security as they deal with managing confidential and critical financial information of customers. Only loan management software that promise built-in security features that take care of data security, user security, and network security should be considered.
The choice of lending management software needs careful consideration of various factors. Lenders prefer partners that offer value to your business, taking care of all your short-term and long-term business requirements.