When you use the right lending software provider, you can make the intimidating process of lending much easier for yourself.
By automating the complex steps and multiple stakeholders associated with lending, loan origination software simplifies and streamlines the process.
When choosing the right lending software company, several factors need to be considered. In this article, we discuss these factors along with a couple of considerations (that are often overlooked, but are nonetheless essential) when entering the lending industry.

Features of a good loan origination software

The following features are a must-have when selecting a lending software provider for your lending business so you can not only enter the industry but also grow.
1. Domain experience

The market may offer affordable loan origination software that is easy to use and adapt.
Make sure, however, that the provider you choose has a proven track record and sufficient experience in this field.
Lenders require a partner/vendor that understands the core of their offering, not just the technical side. A vendor with domain experience can help you design a lending platform that meets your needs.

2. Ease of use

Employees should be able to use and implement the software easily. The software’s efficiency can be measured by the amount of time it saves the stakeholders, freeing them up to handle matters that require human intervention.
Anything that can be easily outsourced should be added to the software’s process workflow to streamline the lending process.
Easy-to-use software also refers to clean UX/UI that makes it enjoyable to use.

3. Strict security controls

Access controls should be granted, revoked, or moderated with ease through the lending software.
Considering the fact that lenders work with a considerable amount of client data, only stakeholders who need this information to underwrite the loan or disburse it should have access to it.
According to PwC’s Global Fintech Survey, 56% of respondents believed privacy and information security would pose a threat to fintech growth. It is essential to take proactive measures to thwart any breach.

4. Easy API plugins

A key feature of any lending software is API integrations, which help customize lending platforms by allowing easy plug-and-play integrations.
Platforms with many features are great, but ensuring the features are well-customized for the lender and their specific target market is even more important.

5. SaaS setup

It is imperative to be able to access the platform from any browser, anywhere. Fast and easy loan origination depends on the accessibility of the platform to the various stakeholders.
By providing a SaaS solution for their clients, good loan origination software will ensure the same.

6. Future proof technology

Due to technology’s dynamic nature, it is possible that by the time you launch your new loan origination software, the industry will have already experienced certain changes due to geopolitical or socioeconomic changes, or unforeseen events like the COVID-19 outbreak world is experiencing right now.
In order to ensure that new iterations and integrations do not hinder smooth loan origination, you should always select a loan software provider with a microservice architecture. You can not only reduce your go-to-market time but also scale exponentially.

7. Omnichannel support and Device agnostic

Fintech lenders do not limit themselves to online lending just because they are fintech lenders.
It is likely that you will find your customers in suburbs and rural areas, among the unbanked population, who have yet to adopt technology or even have access to it.
A good loan software provider allows your customers to apply through any channel they prefer. It should be possible for them to apply online, through an agent, or through your own sales team. The borrowing process should be seamless and easy for them.

8. Efficient and employee-friendly

It is one of the characteristics of dependable loan origination software that it makes the entire process of application, underwriting, decision making, and disbursement easy while reducing error rates to negligible levels. Consider using a loan origination software that allows easy implementation of the entire loan cycle, starting from:

● Lead/application input
● Decision and verification
● Underwriting
● Workflow and audit management
● Document management
● Other features like multi-lingual capabilities, SaaS-based, ACH-enabled funding, etc.

The increasing importance of compliance and regulation

In addition to a steady increase in loan software providers in the market, the number of compliance and regulatory requirements to ensure consumer protection is also increasing. In choosing the right software provider, make sure your loan software provider adheres to these compliances.
Your lending business might be hit hard by unforgiving penalties if you fail to abide by these regulations. Staying on top of new rules and regulations and integrating them into the loan origination process will help you close loans faster while ensuring compliance.
You need to look for the following in your loan software provider when it comes to compliance and regulations:

1. Built-in compliance rules
The essential compliance rules can be built into your software. It works even better when you can customize your lending software. Furthermore, your team will not miss out on important federal guidelines like those established by the Consumer Financial Protection Bureau (CFPB).
2. Lender-specific rules
You should be able to build your own warnings and rules into the software based on your business model. The results are error-free, and customers have a better borrowing experience.
3. Audit trails
Every change to every document at any time should have a version trail, as well as information about who made the changes and when. In addition to providing clarity to the process and changes made, this also ensures accountability.

In the last year, the COVID-19 pandemic has affected the number of loan applications the industry receives.
Furthermore, constantly evolving regulations and compliance requirements have put enormous pressure on lenders.

A lending system that is not only streamlined but also transparent and compliant is the only way to reduce this pressure and make sure you get the majority of applications the market is still enjoying.
When you look for the characteristics mentioned in this article in your loan software provider, you can be sure that you are getting the best loan origination software for your fintech lending business.

At Analytics Fox Softwares, we have our in-house cloud-based loan origination system which can be customized and used to build a platform that matches a lender’s unique requirements based on their target audience and support them during their lending process.

It is now more critical than ever to move away from legacy systems and proprietary software. Contact us today to learn more about how we can build a custom LOS for your business.