5 Things to Look For In A Loan Servicing Platform
Choosing a Loan Servicing Platform that is right for you
If you have decided to upgrade your loan servicing platform - congratulations. Be it a big move like ditching Excel and investing in your first SaaS (software as a service) lending software, or a move to a loan management system that is more innovative - you’re on the right track.
New SaaS platforms can streamline your loan management pipeline and reduce operating cost. A configurable lending software allows you to customise the process to meet your needs and thus leverage the success.
There is one ‘but’, however. The market is saturated - you need to choose wisely. Read below to find 5 key requirements of a SaaS software for lenders.
What To Expect From a Loan Servicing Provider
Loan servicing platforms are crucial for loan providers. The process of managing a loan's lifecycle from loan approval to repayment is complicated and full of hoops to jump through. Limited time and resources meant the number of loans SME lenders could manage was capped, making them struggle. This made it very difficult for small lenders to compete against large financial institutions.
But the landscape has changed thanks to digital transformation. SaaS loan servicing platforms, for a monthly fee, cover a big chunk of the processes. Without automation, SMEs don’t stand a chance to compete. A loan management system lifts the stress off small lenders’ shoulders. It solves the problem of lacking back-office staff and resources, allowing them to scale up the number of loans they offer. If you’d like to see how can it help you, we invite you to a free demo with Hypercore.ai
1. Automated Loan Servicing
The key reason you are looking to upgrade a loan servicing platform is to streamline and automate the process. Loan management requires a lot of human administrative effort, but there are many aspects that can be handled by AI. And therefore your staff will be able to focus on areas that better suit their abilities as opposed to those of a machine.
For example, you can automate payment schedules. On its own, this is not a complicated process, but the time you spend carrying it out could be used on customer communications - something a SaaS software could not do.
2. Simplified configuration
The main reason to choose a loan servicing platform is to simplify the process of loan performance and reporting. Therefore when choosing a Saas lending software for your business ensure that it is one with simple, easy to follow onboarding that can have you set up in minutes. Since there are no two identical lenders, there is no one-for-all solution, thus the platform you choose should be fully customisable to align with your purpose. The main problem with many of the out-of-the-box solutions is that they need a lot of custom programming or expensive add-ons. Ensure the platform that you choose has a number of inbuilt options that do not increase the cost of the monthly licence.
Adding, editing or removing business processes and loans must not require coding or involvement of the IT specialist. Even an inexperienced user shouldn’t struggle with basic customisation of the loan servicing platform: rule changes, field displays, permission configuration and other essentials.
One of the reasons you seek to adopt a new SaaS loan servicing platform is because the legacy doesn't support the analytical and/or reporting needs. Customised dashboards and analytics that are easy to access and read are one of the most sought after assets of loan management tools.
When tailored to the company’s needs, the analytics module should provide valuable insights within several clicks in a visual format. Such would be efficiency, performance, and overall profitability of the loan operations. Dashboards enhance user experience by allowing you to analyse factors that contribute to strategy and decision making: loan application performance, quality of deals and other repeated use of factors.
4. End-to-End Services
From loan origination to repayment, a lending company takes ownership of the entirety of the lending cycle. This is what made it difficult for SMEs whose resources and time are nowhere near what large banks have at their disposal. However, when choosing your SaaS loan servicing platform ensure they package these services together - contributing towards improval of operational efficiency.
Since SaaS lending solutions are cloud-based, they can be accessed by multiple people at the same time, from different locations. This means the originations department, customer service representatives, and collections department stay in constant communication. This will also help adjusting to new lending regulations once they’re passed, bringing up to speed ensuring your entire system falls under compliance. It will also help with the working from home scenario Covid-19 has presented to the industry.
5. Frequent Compliance Updates
When it comes to lending, compliance standards are changing fast. Influenced by industry trends or world events, they update often and may become difficult to stay on top of them. In the best scenario, you are simply behind with them. In the worst - you have overlooked one and your business gets fined for noncompliance.
The top quality SaaS loan servicing platform will keep track of the latest regulatory compliance standards, keeping you up to date with what needs to be done and how to prioritise them. The best platforms update their systems to facilitate the new changes. This means you won’t have to worry about accidentally missing something out: it will all be delivered to you automatically.
SaaS software gave SME lenders a chance to compete with banks in loan processing and servicing solutions. However, the lending technology market is saturated with offers. There are many SaaS loan servicing platform providers but finding the right one is difficult. It takes research and you have to clearly define your goals before taking any platform on. This will ensure that you are carefully planned for success.
Although there is no one-for-all solution, there are 5 key features that a loan management platform should provide. Hypercore.ai has them all - free to try out and see if this is the right platform for you.