5 Benefits of using a Cloud-based Loan Management System

Cloud computing has been around for more than a decade. But its benefits are unravelling now. Everything manual is slow, and anything slow needs to be replaced fast.

According to the Boston Consulting Group's (BCG) November 2018 Digital Lending Report [1],  50% of loan applicants with an internet connection will prefer to buy loans online. Out of the whole population, around 55% of consumers have  digital footprint, with an astounding 23% of those purchasing retail loans digitally . In the case of SMEs, loan ticket sizes influenced digitally are observed to be  higher by 4%. The analysis also indicates that digital lending represents a $1 trillion opportunity in the next five years.

Capgemini’s World Fintech Report 2018[2] explains the impact of this technology in the financial world very nicely. Technology has allowed for a reduction in the time it takes to process loans, which is one of the primary elements that has facilitated such massive development. People no longer need to wait months for credit. In Digital Lending the average time it takes to complete an application and disburse loans  can be within 10 minutes.

With such specific data, it is clear that every lending institution must go digital. It all starts with finding a dependable digital lending software partner who can grasp the complexities of your industry and integrate effortlessly with your current processes. The major advantages of using a cloud based digital lending platform are:

Benefits of Cloud based Loan management system

 Scalability

Consider the last time your company grew or expanded. Additional hardware must have been purchased and installed. One of the biggest advantages of cloud computing is the ability to scale or increase as your business grows. To handle the growing demand for loan processing or expansion into a new region, additional hardware and software resources might be introduced.

If you have seasonal loan cycles, the cloud allows you to instantly distribute resources as needed. You can increase capacity to meet demand during periods of high loan origination activity. You can quickly scale back down as loan volumes drop.

Moreover, the whole cloud-based loan origination system can easily be personalized for different businesses with ease. There is no need to  change all the things in every office out there or every computer in the office.

Enhanced Customer Experience

In today's tough, mobile economy, many organizations face the daily issue of having a legacy loan origination system that is unable to satisfy the expanding needs of consumers and their changing expectations. Trying to give the finest degree of customer experience and increased productivity despite channel silos is, without a doubt, one of the most unpleasant difficulties facing enterprises these days on an almost daily basis.

The use of a Cloud-based system has several important advantages over other bulk software, which might take weeks or months to establish in an organization. Furthermore, a Cloud-based solution can improve lending efficiency without disrupting day-to-day operations.

The user identity and verification criteria in a typical manual loan management system can take a long time. Once an organization employs a Cloud-based Loan Management System, such a laborious process will be sped up. Important characteristics about the loan application, such as banking, income, and account information, as well as credit score and mortgage history, can be obtained promptly for credential verification.

Lower Expenses

Capital expenses in using a cloud-based loan origination system are lesser than a normal server-based system. Money that is used in the installation of hardware, multiple software subscriptions  can be saved, which is a lot for big businesses with multiple offices. The maintenance cost of all the hardware  is also removed. Hardware and software costs are factored into a subscription service for cloud-based loan management software. Cloud providers may gain, provision, and manage hardware, software, and infrastructure at a lower cost than an on-premises data center thanks to economies of scale

The workforce that was being used for maintaining the same data at different locations can now be used for other high-value tasks. This decrease in the need for people is also seen where multiple offices can be handled by one central admin.

 

Real-Time Ecosystem Integration

By utilizing various cloud-based data sources and services as needed, cloud-based loan management software enables better lending decisions and enhances underwriting productivity. Credit, alternative credit score, identity, risk, and value data sources are automatically retrieved as part of the underwriting process, with data returned in a consistent manner. This information gives the underwriter a thorough and accurate picture of the applicant, which is especially useful for analyzing the creditworthiness of applicants with spotty credit histories but who are otherwise qualified borrowers.

Integration with application sources, as well as compliance, document, and texting services, are all features of a modern loan management system. These cloud-based services can be accessed conveniently throughout specific points in the underwriting, funding, or servicing process to guarantee that relevant regulations are followed, reduce the expense of managing paper papers, and notify borrowers about loan status.

Safer, Faster, Smarter Information Management

Documents are stored remotely and securely in an encrypted centralized server system with a Cloud-based solution.. Cloud-based technologies enable real-time sharing and updating of documents and critical data. Only authorized users in the organization's network can update and share information.

In the organization, cloud-based technology can be simply disseminated, configured, and implemented. It's as simple as opening a web browser to access the Cloud-based system. Employees who work remotely have access to the same network system as those who work on-site at the company.

A Cloud-based system like this could be useful in the event of an emergency, such as the current COVID-19 crisis.

Conclusion

The cloud-based loan system has completely revolutionized a variety of industries. The lending business is no exception to such a dramatic shift in the market. The cloud-based lending system's numerous capabilities, features, and benefits to its customers are undeniable. Lesser operational costs, lesser capital investments, and high productivity are some of the additional benefits of the cloud-based loan management system to its users.

This highly automated Cloud-based Loan Management System streamlines the loan origination process while safeguarding sensitive data. As a result, transitioning to a cloud-based management system which include top-of-the-line security capabilities, will ensure better business growth to lenders.

[1] https://image-src.bcg.com/Images/BCG-Digital-Lending-Report_tcm9-197622.pdf

[2] https://www.capgemini.com/wp-content/uploads/2018/02/world-fintech-report-wftr-2018.pdf

  • November 11, 2021