In order to manage their business processes in the most effective manner, businesses use multiple kinds of digital-led software solutions and platforms. These platforms assist with tasks like storing customer data, tracking inventory, and managing financials. When it comes to financial services firms, nothing meets their operational requirements more than being able to improve their customer experience which starts with guaranteeing an effective loan process that meets the needs of the new generation of technology users. In this blog post, we’ll understand what a loan management software is and how it assists financial services firms in attaining next level growth.
An Insight into Loan Management Software
Also known as loan servicing software, loan or lending operations management software is a tool that allows lenders including NBFCs in India, Credit unions and Ficro Financing Institutions in the US region to manage and organize their loans process with more efficiency and faster while lowering the cost-to-serve. It assists them in keeping a track of the crucial loan details, such as the borrower’s information, the size and duration of the loan, and the interest rate. This helps lenders in making informed decisions about their loans.
Majority of the lending institutions depend chiefly on their internal system to keep their books in order. In case you are new to this field, you’ll probably wonder what to expect when working with software for loan management. When you first secure such software, there’s going to be a comprehensive setup process to run through since workflow sequences will be the basis for your automations. Though it can take some time for the set up to be complete, the time invested will eventually result in time savings.
Features of Loan Management Software that Help Financial Services Firms Grow
Good quality loan management software is equipped with all the right features that assist financial services firms. You need to ensure that the software you choose has the right features that can serve your firm for years to come:
Loan Servicing
The key purpose of loan management software is the servicing of the loan itself. This feature needs to include the capability to send statements, gather payments, maintain records of balances and payments, send money to noteholders, manage escrow funds, and monitor delinquencies.
Systems for Loan Account Management
The software ensures that you have the tools you need to manage the loans of your customers. The automation features ensure that your customers can be managed easily without feeling like you are micromanaging each and every account.
Collections
Loan management software allows you to consistently monitor and analyze collections data, thereby empowering you to improve your practices. You can see all the relevant information about a delinquent borrower or loan on one screen. This equips you with the complete picture before you communicate with your borrowers.
Visibility of Lending Workflows and Automations
Reliable software for loan management provides the feature of workflow management for lending institutions. This functionality helps automate the front-end and back-end tasks, including audit control, foreclosure, workout, restructuring, bankruptcy, and repo. These tasks, when handled manually, can be quite time-consuming and prone to errors.
Management Analytics
You can monitor your lending activities and stay updated with trends with the help of the best loan management software. You get access to important information like outstanding obligations or recent disbursements, so that things run seamlessly from beginning to end in a fuss-free manner.
Rules
In case your chosen system provides rules, you need to set those up first. Rules are defined as actions that are configured on the loans in the system, when particular conditions that are defined within the rule are met. In simple terms, rules allow you to automate particular actions once the required conditions are met.
Payment Gateways
Payment gateways are generally used for processing payments and collecting money from customers. This feature of loan management software needs to be perfect, ensuring there’s no room for confusion on part of the paying party, since paying and getting paid are the most important aspects of all of this.
Texting and Email-based Seamless Communication to Lenders
In case texting and email are part of your system, you need to set these up. The tool for texting and email is event-driven in loan management software, and no text or email will be sent out unless that execution is triggered by something.
Custom Reporting and Statements
A reliable loan management system allows you to automatically schedule a range of standard and customized reports, and send out statements quickly and easily. What you are looking for are print and mail statements, and not just any old statements. This makes it easy to send letters, bills, and other documents straight to your clients via presorted mail.
It is important to note that not all loan management software are created equal. With a system as detailed and comprehensive as loan software, you need to ensure that the one you have for your organization is equipped with the right features and functionalities. You need to evaluate the provider of the software and ensure that it is committed to continually improving the platform and keeping it in line with the evolving landscape of technology.
You don’t want to go through the hassles of replacing the software in a few years’ time because it is not equipped with all the features you require or is becoming obsolete. Hence, it’s important that you ensure that the system you select is fully loaded and has everything you need or might need in the future.
Conclusion
Choosing the right loan management software is critical for financial services firms to achieve next level growth. Such software becomes the focal point of your operations and needs to be powerful and work effectively the way you want it to. It includes all of the features outlined above and is best suited for servicing your loan portfolio. Your service provider for loan software should be able to understand your business requirements and customize your dashboards as per your specific needs. Quality loan management software can streamline your business operations and improve efficiency with ease.
Alok heads Damco’s Salesforce Practice and has over a decade of rich experience in setting up practice teams, designing enterprise scale products/ solutions, and sustained business growth of Business Units. Alok is a seasoned IT professional with a proven track record of successfully starting and driving several Salesforce partners programs and technology teams to deliver value across the Salesforce ecosystem. A huge number of engagements under his leadership helps him to understand customer requirements and craft high-impact business solutions on Salesforce based products and platforms.
