How To Choose A Loan Origination System That Fits Your Business?

October 14, 2022

How To Choose A Loan Origination System That Fits Your Business?

The lending industry is undergoing a paradigm shift. Consumer behaviour is rapidly evolving, where borrowers expect loans to be issued in minimal time, probably in one-tap. Such a level of sophistication to issue loans is not possible with manual systems that have an elaborate work-flow of sub-processes that are time, human-resources, and physical-space consuming. Not to undermine the costs that an organization bears to maintain an efficient work-flow. The intervention of multiple people at various stages of the loan-issuing process puts lenders and consumers, at risk with a widened scope of errors and frauds.

The good news is that technology has become so-abled that it can not only wipe out maximum human/procedural errors and scope of potential frauds, but also build a robust, high-performing, and automated system that could process loans in minutes at a substantially lower cost. Adopting technology is inevitable. Tech-abled lending organizations are going to thrive and dominate due to their low-cost-but-high-efficiency operations and customer service.

How can you find a loan origination system that ticks off all the boxes? This guide will be your north star.

  • Simplify Customer On-boarding Journey

India is already mobile-first. Hence, the software should revamp the customer journey, especially during the origination of a loan, and work through all lethargic break-points with simplified initiatives such as OTP based E-KYC, E-signature, E-mandates, E-stamping, etc.

  • Omnichannel Customer Engagement.

A customer can fully trust a brand after it has seen it at least six times. Hence, a synchronized omnichannel approach will best attract and engage a customer. It will not just increase brand recall value but also help the company truly harness the power of its marketing. Hence, a Loan Origination System must be able to offer omnichannel engagement features.

  • Code-free Installation.

Settle for a Loan Origination System that doesn’t expect any coding expertise from an organization’s end. In contrast, the installation should be easy, tech-free, and shouldn’t possess any elaborate training merely for installing it.  

  • Minimization of manual efforts

Organizations should opt for a Loan Origination System that automates maximum pre-lending activities such as analysis of credit history, financial background, work history, collateral management, etc. and make all the documentation paperless.

  • Streamlined third-party integrations

A Loan Origination System should seamlessly support and integrate third-party applications in one click without any effort. Thus, an organization can create a staunch work-flow at minimal or no cost.

  • Customized to suit your needs

There are many lending software in the market, each sustaining on its own merit. However, an organization should choose the one that has the flexibility of customization to cater to the exclusive expectations of its area of operations and fulfil specific needs. A static software will restrict the ability to innovate and stagnant the growth of an organization.

  • Accelerate customer acquisition

An abled Loan Origination Software should accelerate the acquisition of customers by allowing multiple channels of lead generation to work in harmony and toil to convert a lead into a customer with faster and automated communication, evaluation, and loan processing.

  • Cogent Customer Relationship Management

An integrated CRM within the Loan Origination System helps an organization communicate faster with its customers, send automated reminders/notifications, act as a help service desk, and do much more; thus improving the overall experience of the customer.

  • Streamlined workflows

Loan Origination Software should possess a potent algorithm to automatically micro-manage and facilitate each team member to collaborate with a lead and adhere to compliance(company policies) allowing for an ironed workflow so that all the leads are acted upon in time.

  • Automated Credit Risk Analysis

The risk of a borrower turning out to be a default can be eliminated with the Loan Origination Software running a thorough analysis of his background, and highlighting murky details or patterns of his credit history that should be known to the organization before lending.

  • Deviations Management

The Loan Origination Software must be able to detect potential frauds through pre-defined parameters and automated integration with the rating agencies so that companies can take appropriate actions in case of any deviations.

  • Offers a full suite solution

Loan origination is the inception of an entire lending cycle. It makes sense to choose a software partner that also offers solutions on loan management, recovery, and reporting. You avoid having multiple systems in place for each stage, and one software becomes the headquarters of all your business operations.  

We hope that this guide could give you insights on how should you go about adopting a reliable loan origination software.

Having said that, we would appreciate if you check out All Cloud’s Loan Origination System that can be customized to suit your business needs exclusively! Check it out here.

Episode 09
How an Automated Loan Management System Can Maximize your Efficiency

Episode 09
Overcoming Loan Servicing Challenges with Unified Lending Technology

Unified lending technology presents a transformative solution for overcoming the challenges associated with loan servicing. By enabling seamless integration, data centralization, and automated payment processing, lenders can streamline operations, improve efficiency, and enhance customer satisfaction.