Why financial institutions need configurable loan management software

By Rama Krishna Raju, Director and CEO Pennant Technologies

For banks and financial institutions, one of the key questions that comes up frequently in their internal discussions is how to leverage their loan management software or loan platform to deliver innovative products and offerings to their customers. clients.

Financial institutions are constantly competing to deliver lending services and offerings that match user expectations for faster and seamless digital borrowing experiences. Imagine if it were possible for financial institutions or lending organizations to easily configure their loan management software to suit business needs, without waiting for their technology vendor to make customizations and delivery cycles. Financial institutions could add new functionality, configure new variants, and create new controls without disrupting or disconnecting from the original platform, or in this case, the technical framework. As customer needs and market dynamics change, they can enable, disable, or enhance new features, gaining the flexibility to scale their offerings and get creative. Just like everyone’s favorite Lego blocks.

Configurable loan management platforms, equipped with customizable modules, supported by analytics and disruptive technologies, help to process loan applications faster, reduce processing time and, in doing so, deliver a superior customer experience. Each of these modules are not just additions or upgrades, but are an integral part of the major platforms.

To adapt to changes or upgrades, legacy loan management software typically requires a comprehensive needs study and impact analysis, and must develop expertise to deliver customizable loans. This means additional effort for a technology provider, which could take several weeks to make these changes. In an era of hyper-personalization and high competition, this is not the best way to meet the rapidly changing needs of the market.

Financial institutions are typically under pressure to adapt to rapid changes in credit policies, ever-changing regulations, market fluctuations, practices, and more. A configurable loan management platform will allow users to simulate new configurations without going through extensive regression testing. The platform must also be able to track any configuration changes made for audit reviews.

The solution to this problem is to work with a modular loan management platform with customizable components that can be reconfigured internally, without having to call your technology provider each time.

A single, plug-n-play, out-of-the-box solution is unlikely to meet a bank’s needs. For example, lending institutions can customize various moving parts of workflows, repayment schedules, MIS reports, document checklists, and aggregate calculation of various fees and charges, to meet customer needs more quickly and inexpensively.

Financial institutions derive several benefits from the configurable loan management platform:

  • Customizations can be done faster: No technology vendor can understand better than an employee of a financial institution what kind of personalization will work best for the customer and the business. Employees have better context as to why configuration changes are needed and can better assess the impact of those changes. Easily configurable modules reduce the need to research programming skills and the resulting time.
  • Better control of configuration changes: Financial institutions can exercise control over the scope of changes made by applying role-based access and permissions. All configuration changes or modifications are logged and this history is easily accessible and verifiable during an audit.
  • Enhanced services: Financial institutions can implement adaptive and personalized lending products that can respond to rapidly changing industry scenarios in real time, with granular control over what they offer to whom. They can build a robust suite of customer-focused features and end-to-end processing to ensure customers are well served.

The fact is that a loan management system has many moving parts and dynamic conditions, making rapid and continuous adjustment necessary. Any changes to these often complex loan management solutions require a lot of time and investment (such as license fees), which hampers a bank’s ability to keep pace with market dynamics.

A configurable loan management platform with pre-built modules that can be moved around like building blocks, is easier and more scalable than the inexpensive but inflexible out-of-the-box solution. Modularity and flexibility combined with intelligent straight-through processing paired with an API-based infrastructure, helps financial institutions accelerate product innovation in their loan portfolio. Financial institutions can also provide full automation throughout the lending cycle, add functionality, fix bugs, and upgrade architecture without having to engage or hire tech-savvy specialists. From onboarding, credit scoring, loan origination, underwriting, disbursement and repayment, all modules can be integrated into a seamless loan management solution that provides considerable commercial value to financial institutions. Additionally, such configurable loan management software integrates seamlessly with systems of record such as CRM and ERP applications.

What was your experience? What do you think are important considerations for choosing a loan management platform?

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