Nowadays, almost all companies are seeking opportunities to automate their processes, and lenders are no exception. Competition is tough, so to attract customers and prevent their churning, lenders need lending platforms that can help meet client needs.
Hence they face a challenge – how to choose a platform for business between off-the-shelf, configurable, and custom software. So, how to understand what platform fits your business? Let’s discover how to make the right decision in choosing the platform for business.
Table of Contents
Explore your business needs and available budgets
First of all, it is essential to understand what aspects of your business processes you need to improve and automate. You need to launch an audit and collect feedback from your managers and team to understand their hurdles. Once you have done it, it is time to compare your needs with an available budget.
Already at this stage, you can understand whether you can implement all your plans or whether you should prioritize some tasks and then return to the rest. If you find it difficult to make this decision, your vendor can help you with this issue.
Choose between custom, configurable, and ready-made platform
To build from scratch or not to build? That is one of the challenges lenders face when they start creating a lending platform. So, here is a small overview of custom, configurable, and box software to help you choose the right one.
Custom software is a solution designed from scratch to 100% fit your business model and processes. This is the most preferable type of software among giant corporations and enterprises that have lots of processes, money, and time.
However, the development from scratch usually takes 2 years or even more. In addition, such solutions will usually cost millions of dollars. So, if you are looking for a solution for microfinancing, custom software is hardly an option for you.
OOTB platform is a solution that has already been developed and designed. This software type is the best choice for start-ups and small-mid companies who are either only launching lending services or have standard business processes.
Ready-made solutions usually have a standard pack of functions that are common in the lending domain, such as underwriting, customer verification, calculation, reporting, and more. However, some companies like HES FinTech can offer customization of box solutions as well.
The main benefit of a ready-made platform for business is that you can start lending within 2-4 weeks after start and save lots of money. , But you should remember that functionality is limited, or some options might be useless for your business.
Configurable software is a perfect combination of OOTB and custom solutions, so it is in demand between middle-scale lenders and companies. What are the benefits?
- Unlike custom software, a configurable one can be developed within 3 months and will cost far less.
- Unlike a ready-made platform, a configurable solution will contain all the necessary functions and integrations chosen by a lender.
Find a reliable vendor
Finding a reliable vendor might be even more challenging than choosing a software type you need. The best option here is to explore as far as you can – search in Google and Bing for loan management software developers, and read customer reviews, especially on Capterra, G2, and other reliable platforms. Collect feedback from competitors, if possible. In addition, schedule demo tours with fintech developers and explore their powers online.
Start a project
Once your business plan is written, software type is chosen, and a reliable vendor is found, you can start communication with the development and BA teams on creating your software. Remember to discuss all important ideas and questions before signing an agreement to rest assured.
To sum it all up
Taking a decision to join the digital transformation and automation movement might be risky. However, with a reliable team, lenders will get a top-notch product able to cut off onboarding and decision-making time and simplify processes in general. Technology-driven consumer loan software is always a good investment in a successful lending future.