A Gartner report indicates that around 51% of total IT spending will shift from conventional on-premise solutions to the public cloud. We see a similar shift in the financial sector, according to an O’Reilly Cloud Adoption 2021 Report. The report further suggests that the finance and banking sector is the third highest adopter of cloud technology worldwide.
As more and more customers seek competent ways to complete and accelerate their financial tasks, including applying for a loan, it has propelled the demand for easy and convenient digital-only solutions, especially among the Millenials and the Gen Z population. This has compelled Fintech firms to leverage cutting-edge cloud-based loan management software.
Additionally, given the stiff competition around them, there is a sense of urgency greater than ever before to leverage cloud solutions to streamline loan management.
This article uncovers the hidden potential of cloud-based loan management software as we present convincing reasons to back the technology.
4 Reasons Why Embracing Cloud-based Loan Management Software is the Need of the Hour
From improving loan origination to loan servicing and everything in between, there are many reasons why a shift to the cloud is the right move.
1. Unmatched Customer Satisfaction
Numerous winning elements contribute to the success of financial institutions in India, and customer satisfaction is high on the list. Tech-savvy customers seek swift and convenient online solutions in today’s fast-paced world. Lenders can now fulfil these expectations without hassles, thanks to the advent of cloud-based loan management software.
Additionally, providing seamless customer satisfaction is imperative to ensure high customer retention. For instance, the arrival of cloud-based loan management solutions has played a vital role in reducing paperwork and cumbersome physical visits to a bank to complete a loan application. Today’s climate-conscious generation has embraced this steady march towards paperless banking and finance.
2. Staying Organised With Cloud-based Loan Management Software
There is no denying that traditional financial institutions are treading through troubled waters due to various factors. Some of these include dwindling profit margins, increasing competition from Fintech companies, and regulatory uncertainty.
While banks may appear to be losing their appeal, they can turn things around by simplifying and streamlining their loan management processes. Financial institutions and lenders have little room to slip up and stay unorganised as they largely deal with sensitive financial and personal customer information.
Cloud-based loan management software paves the way for an organised lending ecosystem wherein both parties, the borrower and lender, are on the same page.
3. Tapping the Gen Z and Millennial Customer Base
Financial institutions, Gen Z and Millennials are the guardrails of the Indian economy. It is also worth noting that around 440 million or 34 per cent of India’s population are millennials. Additionally, the country’s GenZ population is tipped to constitute roughly about 50 per cent of the country’s population by the end of 2030.
These numbers indicate the prominent demographic influence of millennials and the Gen Z population in India. What is the common trait observed in both sets of groups? Both millennials and Gen Z are tech-savvy and grown up in the digital age. The younger population is more open to exploring new tech-driven financial products as they seek convenience and value accessibility in managing their finances in a digital and streamlined manner.
Forward-looking financial institutions and lenders who leverage technology and prioritise digital transformation to cater to these needs will stay ahead of the curve. Considering the sheer market size of the younger population, it is the right time to migrate to cloud-based loan management software.
4. Budget-friendliness of Cloud-based Loan Management Software
While the on-premise vs cloud software debate never seems to end, the adoption of cloud-based solutions has been higher due to its economic benefits.
A reasonable physical server can cost medium to large companies anything between $5,000- $15,000 annually at an average price of $732 to run a single server in the U.S. Additionally, it could cost another $2,000-$3,000 to ensure you have a reliable backup in place. The costs tend to grow even more when considering all the hidden costs.
On the other hand, cloud-based solutions are affordable as they eliminate infrastructure and maintenance costs. Therefore, it is a good idea to use cloud-based loan management software compared to the resource-intensive on-premise alternatives.
You can use the AWS Pricing Calculator to get a rough estimate for your cloud solution.
Key Considerations for Lenders Before Investing in a Cloud-based Loan Management Software
Now that you know the merits of cloud-based loan management software, let’s tap into the must-have features that align with a lender’s requirements.
Degree of Customization
As lenders continue to embrace cloud solutions to offer a seamless customer experience, they need to find different ways to stand out and cut through the stiff competition. Customisation is a great way to achieve that.
Lenders should invest in end-to-end loan management software that enables them to provide customised solutions for niche customer requirements.
Accurate Data Collection
While it is very important to choose a loan management software that is accurate, it is equally important to ensure it is targeted in its approach to collecting customer information such as credit history, job history, and income.
However, if lenders want to distinguish themselves and surpass the competition, collecting information should transition from collecting basic personal information to including key consumer touchpoints, tendencies, processes, and pain points.
Wrapping it Up
While banks and other financial institutions have traditionally been reluctant to change, the tides are changing. The pressing need for a robust digital infrastructure to provide a seamless customer experience has played a major role in shaping the lend-tech landscape in recent times.
The shift to the cloud or a hybrid model will continue to gain further momentum in the upcoming years as more and more lenders realise the long-term benefits. Right from loan origination to loan servicing, cloud-based loan management software empowers lenders by boosting productivity, minimising processing costs, and simplifying loan management.
Finezza is a top cloud-based loan management software that caters to lenders’ broad and specific requirements. It is essentially designed to help lenders streamline loan management, improve customer relations, and gain a competitive edge over their competition.
Book your free demo today.
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