Banks and lending institutions are expanding their financial products to include lending solutions and terms that can be customized to the individual borrower. This is a response to the ever-expanding ways consumers and businesses are seeking to borrow money for specialized products, but these institutions are hitting roadblocks when it comes to their current lending technology.
Legacy loan origination system (LOS) and loan management system (LMS) software is built to handle specific use cases and to guide loan origination and management through strict processes that were designed to support conventional lending practices. This technology becomes a pain point when lenders seek to work with unconventional borrowers looking for specialized financing, or even retailers using a direct-to-consumer model that doesn’t neatly check all of the boxes required in traditional LOS.
The best way to address these shortcomings is by integrating these LOS and LMS solutions with a business process management solution that can seamlessly incorporate business rules and decisioning software into these workflows. Here are some of the key benefits lenders should be seeking from this integrated approach.
Complex Data Requires Complex Rules Capabilities
With ever-increasing access to valuable lending data and better data analysis tools that leverage machine learning for deeper, more valuable insights, lenders are eager to upgrade risk modeling and other aspects of traditional loan origination. Unfortunately, traditional LOS and LMS solutions don’t offer that flexibility, which is why an integrated approach is required.
Lenders should seek out a business rules and workflow solution that harnesses data for better lending insights and optimized, personalized lending products. This includes the ability to build advanced risk and pricing models, use scorecards and verification workflows to address custom use cases, and enable online document management and e-signature collection to provide faster, more flexible service to customers.
