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WHAT TO EXPECT WHEN EXPECTING A NEW SAAS LOAN ORIGINATION SYSTEM

The defi Team defi INSIGHT, defi LOS

Decision makers in auto lending institutions

We’ve met a lot of lenders in this situation: Their legacy loan origination system has become too pricey to maintain. It lacks the functions they need to compete. They face ever-increasing software and service costs. If they want to make modifications, it takes too long, or requires programming and/or technical expertise. Stuck in time, the systems can’t run the latest fintech. Legacy loan origination solutions have become a drag on competitiveness and profitability. Many lenders see this as a competitive disadvantage, and decide to upgrade to a new cloud-based or software-as-a-service (SaaS) loan origination solution (LOS).

Upgrading from a legacy loan origination system to a new SaaS LOS may seem daunting, but the path is easier—and quicker—than you might imagine. The benefits delivered by the latest fintech functionality are measurable. Here’s what to expect when you upgrade to a new SaaS LOS.

What To Expect When Expecting a New SaaS LOS

Economic and Operational Benefits

Thousands of enterprises in all industries throughout the world have made the move to cloud-based SaaS solutions. There are a lot of benefits to upgrading, mostly falling into two main categories—economic and operational. Economic, because IT hardware and infrastructure expenses can be reduced. Operational, because performance improvements and elimination of inefficient, inconsistent, manual underwriting processes enhance productivity and support better lending decisions.

Economic Benefits

Moving to a new SaaS LOS will have an immediate impact on data center expenses. The SaaS LOS is hosted by a cloud service provider such as AWS, which uses massive economy of scale to provide high-performance servers, storage, and communications infrastructure. Consequently, your costs for IT hardware, data center space, electricity, and cooling are significantly reduced. Associate IT hardware procurement, maintenance, and upgrade costs also decline. Depending on what your legacy LOS costs had been, the economic benefits can be significant.

Fair warning: Some of the savings will be applied to your SaaS LOS subscription fee, which pays for software and IT infrastructure from your SaaS LOS cloud service provider.

Operational Benefits

Compared with a legacy LOS, which typically involves long implementation and customization processes, a new SaaS LOS lets lenders use new functions and see performance improvements immediately. Rapid SaaS implementation and configuration lets lenders establish processes and controls that speed loan originations and help lenders to make better-informed lending decisions. A new SaaS LOS addresses unique lender requirements by:

  • Providing frequent software updates, so lenders can use the latest functional improvements, performance enhancements, and powerful fintech capabilities.
  • Enabling loan application submissions across all channels—dealers, direct online, and mobile (the growing preference for millennial consumers).
  • Supporting intelligent automation to translate credit policies and compliance regulations into decision rules and workflows that eliminate delays and inconsistencies caused by manual underwriting processes.
  • Easily integrating with a wide range of fintech services—alternative credit data, applications sources, compliance, credit bureaus, e-contracts, fraud detection, and vehicle valuation—that improve productivity and support greater confidence in lending decisions.
  • Boosting productivity with faster save-times across all three architecture tiers—server, database, and applications, as well as faster data callouts to integrated fintech services.
  • Quickly scaling to handle changing loan volumes throughout the year or within a lender’s unique lending cycle.

The flexibility, functionality, and superior performance of a new SaaS LOS enhance every step of loan origination, from loan submission through deal structuring to funding. Cloud services, configurability, automation, and a growing number of fintech services give lenders capabilities unheard of in a legacy LOS. When comparing the old and the new, it’s clear SaaS delivers greater value.

Upgrading to a New SaaS LOS?

Upgrading to an SaaS loan origination system can be a huge project. However, cloud/SaaS technologies are worth it. They continue to prove their value both financially and operationally. Lenders bogged down by the cost and limitations of their legacy LOS have the opportunity to upgrade.

 

Getting Started

defi SOLUTIONS loan origination and analytics software experts welcome the opportunity to explain the benefits and value that a new SaaS LOS can provide. Take the first step in meeting the needs of today’s and tomorrow’s lending needs by contacting our team today or registering for a demo of defi LOS.

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