5 Shocking Reasons Why You Shouldn’t Use an Out-Of-The-Box LMS

The world is becoming increasingly digital, with organizations of all kinds choosing automation for various processes. One of the keys to staying successful is keeping up with the technology that is providing benefits for both the customer and the organization. Here we will discuss how LMS, or loan management software, is helping businesses across the globe automate their processes and improve their bottom line. 

Prospective lending clients are not up for heading to brick-and-mortar banks to manually complete a loan application and wait for weeks for a response.  They are picking up their laptops, tablets, and phones and expecting an answer immediately.  They also are supplying financial and personal information and require a secure place to do this.  Your team is waiting for accurate information to make these decisions quickly. 

Even before the days of COVID-19 and social distancing, your lending customers were making the move to more digital financial services. An LMS can ensure that your customer and your team can avoid delays, inaccuracies, and the pain of dealing with back and forth communications. Other lenders are embracing the digital transformation and it is time that your organization makes the move as well. For this, and other reasons, a digital solution is now necessary to your company’s survival. 

While companies are rushing to get a loan management software in place, they may not know that a custom loan management system, or custom loan servicing software solution is far superior to anything you would get “out-of-the-box”. An LMS, depending on your needs, can be set up as cloud-based and used to increase productivity and make processes more efficient from the moment an application is complete. The best solution is one that will not only meet your requirements today but will also grow as your company scales.

What is a Loan Management System?

A Loan Management System is software that gives your organization a range of processes in one place that handles many facets of loan processing and management. With the software, you can originate loans, service the loans with compliance and accuracy in mind, and handle debt collection. These lending applications automate your loan processes and make payment management easy, giving your customers and team the ability to:

Reduce EffortsCustomer payments require them to log on and enter payment information each month. Your staff must then update records.  With an effective LMS, payments and collections can be automated. 

Better Manage InformationInformation on paper is likely to be lost and input inaccurately.  With an LMS all your customer’s information and their transactions can be on one secure system, reducing the amount of paperwork your company handles and making it easier to access the information you need. With an LMS, your customers can handle several processes on their own, when it is most convenient for them. 

Better Please Customers – With a loan management system, you can implement convenient processes to handle loan approvals, payments, and communication with clients.  This helps to please customers, increasing the chance that they will return to your organization in the future. 

Main Benefits of Loan Servicing Software

It Reduces Security & Regulatory Risks

When your processes are manual, the associated human error could lead to unnecessary violations and legal issues. A loan management system keeps you protected from regulatory hassles and keeps the entire company compliant. 

In addition to helping your organization avoid these issues, an LMS protects your proprietary information from getting out. It also keeps your client’s vital private data secure, like tax identification numbers and income information. 

It is a Time Saver

Handling changes in payment schedules, charging fees, creating default notices, managing payments, and more can be done through your LMS.  This helps to save time and resources for your staff. Loan management software can simplify daily tasks and focus on high-value tasks. 

It Improves Your Customer’s Experience

Clients expect a lot these days and they are not as likely to be okay with waiting for information or long approval processes. So many things are going automated, making their lives easier in so many ways.  As a lender, you must keep up with technology and always be looking for ways to make the lending process better for them. 

With an LMS, your customers experience improved processes that are more efficient, giving them a better experience with your company. Loan applications can be handled online with your clients putting information into the system. In addition to an easier way to apply, an automated system helps your team make decisions faster, getting answers to your clients more quickly. 

It Improves the Bottom Line

Avoiding regulatory trouble and security risks helps prevent fines and hits to your company’s reputation. An LMS reduces risks and losses, as well as the financial losses that come with them. When employees have automation on their side, they can concentrate on generating new business.  When you are more responsive, customers are happier. And happy customers are return customers.  These customers are also more likely to refer others. 

It Helps to Reduce Debts

Loan servicing software helps you discover delinquent payments before accounts become critically late, helping your cash flow and reduce the costs of collections. Keeping on top of collections issues helps to improve your organization’s bottom line. 

Better Data Creation

It is important to be able to have accurate accounting reports, invoices, and statements. Loan management software ensures you have accurate data that you need, helps you extract only the information you need in real-time, and customize your reports.  With the right data, you can make better decisions. 

It Helps to Improve Organization

Financial institutions must keep information organized.  Loan management software helps your organization store information in a more organized manner and more securely. 

It Helps Mitigate Errors

A J.D. Power survey revealed that errors in billing and payments greatly affect customer satisfaction. Having effective loan servicing software that reduces the number of errors helps you keep your customers happy. 

Helps You Attract a New Generation of Clients

Millennials are looking for student loans and will one day need a mortgage.  This segment of the market is looking for convenience over anything else. They handle every aspect of their lives from their devices. Everything from applying for a loan and transmitting information requested from the lender to paying off their loans needs to be done digitally. 

There are other benefits of having an LMS in place including:

  • Better ability to make forecasts and revenue predictions
  • Predictive analytics to better detect fraud
  • and much more!

Why a Custom LMS is Superior

We have discussed why an LMS is your company’s best bet, now let us discuss why your LMS should be custom to your company.  You may think that finding any installable system is the right choice because it may seem easy to use and less expensive.  But you are then left to handle all updates, integrations, and scaling when your business is ready to grow. 

You need a system that can be implemented, learned by your staff, and up and running quickly. The workflow must be well-designed and technology support must be available.  Choosing an out of the box, one size fits all software will not provide a comprehensive solution for your company for several reasons including:

Each Lender is Unique

Every lender has their own unique set of criteria for their business including the regulatory requirements of their state, their client rating system, their industries and lending criteria, and their lending terms. This dictates that your LMS must be customized to fit your business.

Time Savings Come from Ease of Use

Your LMS must be easy for them to implement and use daily. To do this, it must fit the processes that your company uses. A custom-built loan management system created by Solvtopia will fit your exact needs making it easier to make the transition to automation simple. 

Not Having to Start Over

The downtime and financial commitment required make it vital that the solution you choose works for your business. You do not want to find out months later that the system you choose wasn’t a good fit. Having a custom solution in place from the beginning leaves you only having to make improvements as time goes on with updates. 

A Custom Solution Helps with Integrations

The systems currently being used must be able to be integrated with your LMS.  Without this, your team faces frustrations or other software changes must be made. 

A Custom Solution Can Offer a Seamless Lending Experience 

With a Solvtopia custom LMS, your clients are using a system that is seamless throughout the lifecycle of their loan.  From origination to underwriting, tracking and collateral management, loan servicing, and reporting your custom solution will make it easier for your clients to onboard and for your staff to manage their loans. 

The Solvtopia loan management system solution gives you the chance to automate your origination tasks while keeping you compliant and addressing risks. Updating your technology by adding a custom LMS helps you succeed in the new world of lending. Solvtopia offers loan management solutions and more. Streamlined processes, delivered by our process of getting to know your company and your expected outcomes can help you acquire a well-designed and developed loan management software solution for your organization. Learn more by visiting us online at solvtopia.com. 

Solvtopia can help you:

  • Streamline approvals 
  • Unify the lending experience across the company
  • Integrate your other systems
  • Allow clients to self-service their loans