Choosing the right software for corporate support can be an overwhelming task, particularly when it is related to your core service. It is essential to understand the requirements of your business and only then proceed in a programmed manner to make the right choice. While it wouldn’t be far-fetched to call this a make-or-break decision for your business, we’ve made it easier for you by providing a framework for the right protocol.
From years of firsthand experience, we have summarized the essential practices required for choosing the right loan servicing and/or cloud lending software into 4 essential steps. With these steps, you will be able to choose software with long-lasting benefits for your business.
- Assessing Your Needs
- Exploring Your Options
- Evaluating the Shortlisted Options
- Implementing Your Final Choice
Assessing Your Needs
Before you start exploring options for lending software, it’s best to consider some crucial internal factors of your business such as the short-term and long-term requirements and goals of your business, the requirements of your customers, the method of delivery for your software, etc.
Start the process of choosing the right cloud lending software by analyzing your business goals, requirements, and strategy. The lending software is meant to aid your business strategy so it should be aligned with your business goals. For this, you’ll need to sit down with your team and create a needs-gap analysis by going through some key questions, such as:
- Where is your business standing today and where do you see it in the long term?
- Is your current software system up to par? If not, then where is it lacking?
- What additional functionalities could improve your current cloud lending software?
- Could another cloud lending software provide improved credit scoring and enhanced automation?
- Who would be using this software?
- Would you opt for in-house lending software or off-site cloud lending software? Also, would you have a dedicated IT team for managing the in-house software system?
For any business to succeed, it’s essential to know its users and their needs, so whatever you do keep your users the center of your focus. Sit down with your entire team, from the top management to the loan lending officers who will be dealing with the customers first-hand. Conduct surveys among your users to find out just how successful your potential software system will be practical.
Software Hosting Method
Another key factor that will impact your business is choosing the method of delivery for your loan lending software. There are two main methods to choose from:
- The first is the conventional method of purchasing a software license for an in-house software program. The license covers all the IT support staff that will be managing it. This in-house software and its database are physically loaded onto servers and your corporate computer systems, thereby allowing a user to use the system.
- The second method is called Software as a Service (SaaS), and it refers to an off-site, secure cloud lending software operated through a third-party organization. This option suits small to medium businesses, as you don’t have to arrange a dedicated IT team for it. The software is managed by the cloud lending software organization for a monthly fee.
Exploring Your Options
Once you’ve determined the internal requirements of your business, it’s best to explore what software options are available. Focus on key areas such as service functionality, flexible management, smart automation, and credit scoring. Once done, shortlist options that are excelling in these areas.
An ideal cloud lending software partner has a flexible integrated origination and servicing platform. It offers individual modules, letting you choose what you need currently while always having the option to access more features if and when needed in the future. The loan origination features should include:
- Automated calculation of loan amount, term period of the loan, and the interest rate, etc.
- Automated decision-making
- Flexible management of the lender’s credit policies
- Remote access for different sales points
- Separate evaluation processes for different business products and business production line
- Swift adjustment to new lending rules and policies
- Customized tracking
As a business person, your goal is to opt for a software system that streamlines your process and allows you to increase revenues. Therefore, you should look for software that will automate several tedious tasks allowing your team to focus their energy on important decisions and tasks. The software must be flexible for managers to use according to their style, and it should be easy to integrate with multiple vendors.
Optimal Credit Scoring
Only a lending software that aids in risk management for both new and current accounts alike, will get you optimal credit scoring. The best program choices offer integration with all the credit reporting agencies. The best programs also make use of machine learning and data analysis. By incorporating artificial intelligence, these programs continuously update and improve their credit scoring capabilities, so it’s best to look for software choices that check the boxes for these traits.
Evaluating the Shortlisted Options
Once you’ve successfully found some great options on your hunt for the right cloud lending software, you may evaluate them further to get your business the right and worthy solution. You can start the evaluation process by getting to know your shortlisted finalists a bit better.
Create a carefully thought-out spreadsheet of important questions regarding their modules, customization scope, pricing, security, etc. Meet with their sales reps and ask them these questions. You may even request an online demonstration of their software. Note down any further questions that may arise during these demos and make sure to get your answers before making your final decision. You can even conduct surveys with their current clients to get a better picture. It’s better to be sure of what you’re signing up for, than suffering from business loss down the lane due to a hasty choice.
Price is an important factor while choosing the right loan servicing software for your business, as you wouldn’t want to upset your resource allocation plans. Therefore, it’s best to opt for a provider offering only those functionalities that you require instead of paying for features you wouldn’t be utilizing. We would recommend choosing a software partner that allows you to access the functionalities you need and upgrade as your needs evolve. Keep all necessary, potential costs in check before making a decision. These costs include software and hardware costs, implementation costs, training costs, data conversion costs, etc.
Previous Performance History
Do not merely rely on the advertised credentials of a service provider, instead ask for demos and conduct surveys. Ensure that your potential servicing software provider has a proven performance history. You must ensure that lending is their core function, and not just a side hustle. Check for press publications regarding their performance. Also, see how long they have been in business. You can also check online for reviews of actual users and see if the provider has expanded over time and/or bagged any awards for their previous performance.
User-Friendly Installation and Operations
The right software is also easy to understand and implement. There is no benefit in saving on resources by opting for a cheaper option that isn’t easy to use, as all the ‘saved’ resources will have to be redirected on training your staff to understand it, and there still might be lots of errors and time and opportunities will be lost.
Therefore, choose software that can be readily and easily installed. This is another reason why we are slightly partial to cloud lending software. Secondly, your employees should be able to easily use it. It shouldn’t have manuals and instructions filled with lots of technical jargon.
24/7 Customer Service
When you’re an entrepreneur, you do not want to risk missing out on any opportunities due to technical failures or any reason whatsoever. That is why you must opt for lending software that offers 24/7 customer support to your employees. Also, the customer support staff must be experts in providing solutions to resolve issues in the first contact.
Implementing Your Final Choice
Now that you have done a thorough assessment of your requirements and the available options, and you have also weighed the pros and cons of those options, you must not sit on the fence. Make that call now, because you know exactly which vendor seems to offer and excel in the expertise that your business requires. Carefully develop an internal proposal that will guarantee you secure buy-in from all your stakeholders, before you announce your decision outward. Make sure to communicate all your requirements and how they match with your chosen vendor’s expertise.
Although these steps may seem time-consuming at first, proceeding forth with this carefully structured decision-making framework is bound to benefit you. It should help you choose the right cloud lending software and help your business get on track for the best opportunities. After all, at Fundingo our main goal is to save you from the loss of time, effort, business opportunities and money that can result from using the wrong servicing software.
President and founder of Fundingo’s loan origination, underwriting, and servicing solution with 10+ years of experience in the alternative lending space and a deep understanding of the operations within this industry. An innovative leader that has built a solution recognized by Salesforce CRM for making an impact within the lending industry by helping companies make faster, better decisions.