As the world and its markets become increasingly digital, your company needs to stay relevant. From mundane tasks to major financial decisions, many business moves are made online or through the cloud. Your clients, vendors, and business partners have come to expect the reliability, flexibility, and versatility of digital transactions in every aspect of their lives.
Modern loan servicing software has become a requirement for lenders and other financial entities. In 2021, you can choose from pre-developed loan management systems (LMS), or opt for a more robust customized solution. Explore the best LMS options in 2021 and learn why customized software is a more powerful choice.
The Main Benefits Of Loan Servicing Software
The financial industry relies upon rapid, accurate, and secure transmission of information. Loan servicing software has the potential to increase financial security, save time, and improve customer satisfaction while also improving margins. Learn how an LMS can transform your operations.
Reduce Risks and Increase Security
Banks and lenders operate under heavy Federal regulations designed to monitor decisions, actions, and relationships. If your company manages processes manually, human error can lead to violations, legal problems, and account mistakes. Manual processing also exposes sensitive data to risk. Client information and proprietary business details should never be stored on individual workstations or sent through insecure means. However, these situations occur when people handle sensitive data. You can avoid these common risks and improve your security measures by using a loan management system instead of manual calculations.
In addition to being a security risk, human calculations and processes take an unnecessary amount of time. Assigning fees, managing late payments, generating notices of default, and other regular tasks can consume a lot of staff time when performed manually. Automating these tasks through an LMS allows your team to focus on higher-level tasks instead.
Improve The Customer Experience
Lenders work with clients who are emotionally charged. Even reasonable people can sometimes struggle to accept slight deviations or mistakes in the loan process. By using an LMS, you can streamline and expedite the lending process. This helps clients have a better experience, leading to better satisfaction ratings and higher percentages of returning clients.
These three benefits of using a loan management system all impact your bottom line. By avoiding regulatory fees, saving employee time, and improving customer satisfaction, you can improve your margins company-wide.
The Best Software Available In 2021
There is a range of useful LMS tools available for banks, lenders, and other financial institutions in 2021. Since these products are commercially developed for the industry at large, they lack true customization and may not provide every function your company needs. However, pre-developed loan servicing applications can offer benefits. TurnKey Lender, FIS Commercial Lending Suite, and LoanPro are the three best LMS platforms in 2021. Let’s explore the benefits and drawbacks of each tool to explore how it might serve your company.
If you’re interested in a pre-built LMS solution, TurnKey Lender is 2021’s best choice. This company specializes in AI software designed specifically for lenders. By fully automating the lending process, TurnKey Lender’s intelligent software allows your company to streamline and expedite each transaction. This cloud-based LMS evaluates applicants, supports decision-making, and automates a variety of online loans.
The software is designed for a range of loan products, including grant management, money lending, leasing, in-house financing, trade finance, SME financing, and other traditional and alternative styles of loan.
- Software is scalable for any size lender
- Language support for 12 global languages
- Cloud-based versatility
- Integrated fraud protection
- Modular architecture
- Lacks full customization
- Full reporting is only available as an add-on service
- Limited task management
- CRM integration is limited
- Default loan programs may be restrictive compared to your company’s offerings
FIS Commercial Lending Suite
FIS Commercial Lending Suite is another solid option among commercial LMS products. FIS Commercial Lending Suite offers several levels of software, allowing you to mix and match to fit your specific needs. Choose from specific modules to handle particular tasks, or use the full suite to manage your entire loan process. If you choose the complete collection of tools, your company can benefit from a built-in guided workflow as well as performance analytics.
- Modules allow you to choose what services you need
- Easily migrate client details from other services
- Tasks can be shared within workgroups
- Simple, easy navigation and interface
- Imported data can contain errors, requiring manual checks
- Elements don’t always display on the screen
- Files cannot be renamed after their creation or deleted
- Report functionality is unintuitive
LoanPro is another top LMS solution in 2021. As a cloud-based loan management system, LoanPro offers flexible products to fit many financial needs. Your company can implement payment solutions, data management tools, reporting, customer communication, and more. Additionally, your LoanPro account can be used to make a unique website that your company can use to drive online loan applications. LoanPro is hosted on the Amazon Web Services (AWS) cloud so your team can use these tools in remote or distributed positions.
- PCI-DSS & SOC I & II certified platform
- Data management tools include verification, storage, and live amortization
- Robust API-based services
- Designed to scale with your company
- Vulnerable to AWS outages
- Reporting is not automatic but must be customized
- Unintuitive layout
- Difficult navigation
Why A Custom Solution Is Superior In 2021
As we’ve seen, an LMS is a modern necessity in the financial industry. If your company doesn’t use an LMS, you’re exposed to unnecessary risk, lost time, and dissatisfied customers. However, choosing a loan management platform is a major decision.
When you choose a pre-developed LMS instead of working with a customized solution, you’re choosing a “one size fits all” product. These tools have many benefits, but our reviews show that even the best LMS platforms also feature serious drawbacks. These tools may lack robust reporting capabilities, limit your staff’s ability to work as a team, or even lose data during transfers.
Subscription LMS products may make a part of your workflow easier, but they can’t truly meet all of your company’s unique needs. Let’s explore the reasons why a customized lending management platform is the better choice.
Every Lender Is Different
With your professional experience, you know that every bank, lender, and financial institution is different. Organizations vary based on mandated state requirements, client rating systems, lending criteria, available rates, preferred industries, and many other factors.
Remember your company’s value proposition, which is the promise you make to your clients about your services makes your brand unique. Similarly, not every prospective client is a good fit for your services, neither is every LMS a wise match for your needs. A “one size fits all” LMS product might be a great solution for another lender, but if the services don’t fit your business model, it can do your company more harm than good.
Saving Time Requires Ease Of Use
One major benefit to working with an LMS is the opportunity to save time and resources. Each transaction that can be automated represents time your staff can spend on more important matters. However, your loan servicing software will only save time if your team can easily understand, use, and navigate the platform. If a system is hard to learn, overly complicated, or requires more manual effort to make it fit your processes, your company hasn’t saved time at all. Consequently, a poorly chosen LMS can make your business less efficient.
Instead of choosing an ill-fitting solution off the shelf, consider a custom-built Solvtopia solution. Your custom LMS will be created with your company’s precise needs, processes, file types, and other requirements in mind. The transition process will be easier to navigate when you are confident that moving to a customized LMS will make your team more efficient and productive.
Don’t Go Back To Square One
Integrating a major tool into your workflow requires an investment, both in time and money. Moving to a pre-developed LMS can involve downtime during the transition, then a ramping-up period as your team learns the new processes. It can take months to start operating at normal speeds again.
If you work with an off-the-shelf LMS, you risk discovering that the new system doesn’t truly fit your needs. At this point, you face two poor choices𑁋You can struggle forward with the new system, even when though it doesn’t meet your needs and may actively impede your progress; or you can go back to your previous methods, throwing away your wasted resources.
A loan management system is a foundational element of any lender’s business. Your LMS represents the core of your work. Don’t take chances or be tempted to cut corners with this vital software. A customized solution will meet your company’s needs as soon as it’s implemented, then allow for further updates throughout its lifespan. Unique and personalized software updates are only available when you choose a custom LMS, but this perk allows your company to grow, evolve, and scale.
Custom Integrations Are Key
Every unique lender uses its specialized combination of software, services, and tools. Your company likely works with a particular mix of platforms to handle tasks such as marketing, web development, customer relationship management, and more.
It can be challenging to find a pre-designed LMS that seamlessly integrates with all of your other tools. In this situation, you may need to sacrifice functionality to force your LMS to fit. However, custom loan servicing software avoids this problem entirely. Your customized system will be designed to integrate with all of your existing tools. This streamlines the integration process and reduces the number of changes taking place.
What To Do About it
Loan management systems are a necessary element of today’s financial industry. Every lender, bank, and other financial entity needs a robust LMS to reduce risk, save time, please customers, and generally increase margins. Pre-developed LMS platforms offer some benefits, but can’t meet your company’s every unique need.
Instead, you will enjoy much better results by working with Solvtopia to develop a customized LMS solution. Solvtopia is a US-based development agency with endless experience building custom products. You must have an LMS to drive lending success in today’s market, but if you don’t use a custom product, the investment isn’t worth it. Schedule a free call with Solvtopia team leads to discuss options for your company. We’ll learn about your particular needs, struggles, and goals, then help build a plan to continue driving your success.