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7 factors to consider when purchasing a Loan Management System

7 factors to consider when purchasing a Loan Management System

Every credit institution aims at meeting the financial needs of all their customers with ease and stimulate business growth. To achieve efficiency, a good loan management system is needed.

Challenges in the industry

  • Cost control
  • Poor loan recovery
  • Weak institutional capacity
  • Employee management
  • Administrative challenges
  • Bulk membership data management
  • Management of range of products against quality services
  • Accounts and record keeping challenges
  • High Interest rates due to costs
  • Competition
  • Auditing and Inspection challenges

It is important that credit institutions acquire an innovative, turn-key, end-to-end securities-based loan management system (LMS). One that can connect lenders seeking to advance high-quality, cost effective loans with borrowers requiring convenient access to credit.

What considerations do I make when seeking a loan management software?

Cost

The first thing to consider is the cost. Cost here does not mean price rather, the overall cost of using the system. It is not only key to get an affordable system but also one which will reduce the cost of your operations from end to end.  A good system will combine several applications and functions to perform seamless operations without much of human interference.

Third party integration

Compatibility with other technologies and systems is equally important when choosing an LMS. You need a system that can easily integrate with banks, SMS platforms, mobile payment platforms and other payment platforms like Paypal and VISA cards. Any limitation in payment modes means that you are losing a market segment.
In addition, scalability too must be given priority when choosing a system. Loan management software should be scalable to a level of one stop shop for a credit institution.

Ease to use

Great loan management systems must be easy to use too. Training is a very costly exercise. Choosing a system that requires minimal or no training will save you money and time. Also, a system which clients can use is advantageous and reduces dependency on staff.
The member registration process should be easy for the members to do on their own. Clients should also be able to execute other activities such as checking loan balances, account statements and loan repayment with ease. A system that can support such activities is always the best.

Security

Security of the data is one of the key factors to consider when choosing loan management software. Handling such sensitive bulk data demands a system which is not susceptible to hackers and malware. Client data should be secure at all times.

Accessibility

Accessibility is the other thing that you must consider when looking for a system. A cloud based system which can be accessed at any time and at any place is currently most preferred. This makes sure that you are not limited by location or hours of business. At the same time, stability must be checked. The system must be stable, fast and with a memory worth of keeping the mammoth data you are dealing with.

Accounting Reports

Reporting and accounting are vital activities/ processes in any financial institution. A system must provide all required accounting and auditing reports at a click of a button. Check your reporting needs against the system you are choosing before acquiring one.

Support

Lastly, you must consider the need for support. All institutions require support at some point. A good system developer must show how best he/she will provide support is needed.

The process of finding a good system is very important. Examine carefully all the options presented to you and find a system that is suitable for you.

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