loan origination software for banks


The defi Team Credit Unions, defi INSIGHT, Fraud, Originations, Reporting & Analytics, Simplifying Processes, X-defi Partners

loan origination software for banks

In comparison to nationwide financial institutions, credit unions have an inherent advantage; they understand the local economy and the financial needs of members. As a result, they are better positioned to tailor services to the needs of local markets. Auto loans and leases present a particularly promising opportunity for credit unions to build on the goodwill they’ve already established. By promoting competitive auto loans to members, establishing lending relationships with local auto dealers, or making it easy for anyone in the community to apply for an auto loan or lease, credit unions can enhance both profitability and member loyalty. 

Of course, the key to providing these capabilities is the credit union software solution. There’s a wide range of solutions on the market. And it’s a significant undertaking in choosing the software solution that best fits your unique needs. 

Credit Union Software Solutions: What to Look for

Significant advancements in the way lending software solutions are implemented and managed enable credit unions to quickly take advantage of the latest capabilities, automatically update software to continually enhance performance, and easily extend functionality through integration with innovative information sources and services. To realize these benefits, look for a credit union software solution that provides: 

  • A cloud-based lending platform hosted by market-leading cloud service providers. Cloud solutions have been adopted across all industries and offer proven, quantifiable advantages of accelerated implementation time and lower operational costs. 
  • Configuration menus to customize nearly every aspect of the solution, including user interface, access rights, workflows, queues, decision rules, verifications, and integration with cloud-based lending services. In comparison to lending software that requires protracted, custom programming, the configuration approach allows knowledgeable lending professionals to quickly customize the solution to meet a lender’s process and policy requirements. 
Configuration menus allow knowledgeable, authorized users to easily customize the user interface for individual roles and responsibilities.   
  • Integrated analytics enables lending professionals to monitor developing trends in loan or lease applications and portfolio performance. Today, analytics is an essential component of any credit union software solution that allows lending professionals to explore data and apply this insight to identify trends, as well as refine credit policies to reduce risk. 

Software Features to Boost Efficiency and Reduce Risk

Cloud, configuration, and analytics are three overarching features that any credit union software solution should provide. Delving a little deeper into additional functionality that gives credit unions a decided advantage compared to older software solutions, you’ll also want to consider capabilities that can significantly enhance efficiency throughout the entire lending lifecycle. In particular, look for:

  • Configurable decision rules that drive workflows—loan submission, underwriting, funding, and servicing. Well-designed decision rules can eliminate many manual decisions and handoffs that undermine process efficiency or lead to inconsistent decisions. Underwriting decisions regarding borrower attributes that previously took minutes are accomplished in a fraction of a second. Decision rules translate credit policies and compliance guidelines into consistently executed processes that also provide an audit trail.
  • A completely digital lending experience. There’s no need to be bogged down with paper and its inherent inefficiencies. From initial loan submission through offer to funding, and throughout the servicing phase, all communications, all documentation can be handled digitally. Mobile devices now capture required documentation associated with loan or lease applications. Offers can be delivered as e-contracts for quick review by borrowers. E-signatures confirm borrowers’ acceptance of terms and conditions. Borrowers can set up auto-payments, make one-time payments, access statements, and make updates to contact information online.  
credit union software solutions
Borrowers can access current account information anywhere, anytime online, reducing the need for printed statements and calls to customer service.

A completely digital lending experience delivers greater efficiency throughout the entire lending cycle, gives borrowers greater control over their accounts, significantly reduces printing and mailing costs, and reduces the need for borrowers to contact the call center.

  • Information sources and services that reduce risk. One of the most significant improvements in credit union software solutions is the ability to integrate a wide range of lending-specific information sources and services that give lenders greater confidence in assessing a borrower’s financial situation and creditworthiness. These resources provide 3 distinct benefits for lenders.
    • Improve the chances of extending credit to borrowers with limited credit history. Alternative credit data sources use utility, rental, and mobile payment records, along with banking information to provide a clearer picture of a borrower’s creditworthiness. In many instances, an applicant who would be denied credit because of a lack of credit history can be offered credit.
    • Detect fraudulent applications that are likely to result in defaults. Sophisticated algorithms analyze loan or lease applications looking for inconsistent information that indicates potential fraud. Depending on the confidence in the fraud score, the application can be auto-declined (including the reason) or reviewed by an experienced underwriter to determine eligibility.
    • Risk-based loan or lease terms. Machine learning evaluates hundreds of historical borrower attributes as well as a credit union’s portfolio to develop credit models that assess lending risk and recommend appropriate terms and conditions. Lenders can experience up to a 15% increase in auto loan approval rates without a reduction in risk.

Choose the Right Software Solution Partner

While the technology and capabilities that underlie modern credit union software solutions are critical to maintaining efficient, profitable lending operations, also consider the focus of the software vendor. Look for a vendor that has its roots in lending and continues to focus on innovative solutions and services that improve the experience of credit unions and their members. They’ll understand all the nuances of delivering the functionality and user experience that optimizes the lending process for all involved—credit union members existing and new, loan officers, managers, risk analysts, and customer service representatives. 

Take advantage of a rich knowledge base provided by the software vendor and fellow users to gain the greatest efficiency and benefit from your credit union software solution.

The best credit union software vendors employ people who have real-world lending experience that guided the development, implementation, and support of the software. Customer support portals, annual user group conferences, and customer round tables are important aspects of establishing a mutually beneficial business relationship. When choosing a credit union software solution, take a holistic approach. Technology, industry focus, and employee experience are all vital to your success.

Getting Started

defi SOLUTIONS provides configurable lease or loan origination systems, loan management and servicing, analytics and reporting for leading financial institutions. If you’re struggling with the limitations of your current lending software solution, take the first step in realizing the benefits of modern technology. Contact our team today or register for a demo.

(Visited 242 times, 1 visits today)