How COVID changed what businesses look for in loan management software
There probably isn’t a market that wasn’t impacted by the global pandemic. For financing and leasing companies the pandemic also brought a fair share of difficulties. With the whole world changing around them, seemingly every business needs to adapt. And that means looking for more flexible and more attractive leasing products. This is how the COVID pandemic changed the needs of leasing companies looking for loan management software.
Before 2020, the world’s economy was growing. Almost every single country had economic growth, meaning that businesses were doing well. Before the COVID outbreak, loan companies were looking for solutions that are scalable and ready for growth.
With plans drawn up, sometimes for years in advance, software needed to be optimized to do a certain number of things really well. However, at the same time, there were certain features that clients paid less attention to. They were less keen on choosing software that covered a wider spectrum of issues. With no expectation of being forced to work remotely, businesses weren’t really looking for a versatile solution that enables smooth and streamlined loan origination, loan termination, and wholesome loan management with remote access.
So, to sum up – loan management software needs pre-pandemic were mostly focused around scalability for the future. So, in the last following years before the outbreak, businesses were leaning away from on-premise solutions in favor of cloud-based software. Financing companies that switched to the cloud, had a much easier time transitioning to successful operation during the pandemic when all work had to be done remotely.
As we just mentioned, loan management software needs from users changed during and after the pandemic. First and foremost – the need for scalability is reduced. We could now notice a more increased attention to integration with partners, self-service tools as well as much more attention to task automation, generating insights.
Clients who were taking out loans and looking to do so amidst or after the pandemic also had a change of needs. They were looking for flexibility in terms of loans and were also pushing to change and/or adjust current contracts. Especially if the financing company was using legacy software with no possibility for updates, adjusting to the new normal was impossible. They had to implement modern solutions on the fly which was quite difficult to do.
To prevent financial loss, companies had to adapt and make the necessary adjustments in order to please clients. Flexible new lending software helped achieved that whilst retaining most of the loans on their portfolio.
For the most part, companies that give out loans were beginning to give more priority to software that’s not only flexible but to those options that record or generate accurate information on-demand. It also should offer smooth communication between users (e.g. leaving notes, adding files, exporting content, etc.). In addition, with much less supervision within many companies, new software had to have automation of tasks, whilst AI tools became even more useful. For auto-approval, reminders, and prompting suggestions or advice to take action – AI and automated features are really important. They were able to help compensate for the lack of supervision and the lack of possibility for managers to retain the same hands-on approach as they had before. Hence, financing companies were forced to innovate and depend on automated and AI features to do more work. And those companies that did trust them, seemed to have gotten a lot of benefit in return. That benefit came in the shape of a portfolio that didn’t shrink or even grew. Alongside the gains to the portfolio, you had more satisfied customers. The tools offered insights and suggestions that employees were able to use for upselling, contract renewals, and other actions that made clients happier.
How to find the right solution for you?
If you’re looking to upgrade your current loan management software or choose your first solution entirely, we’re here to help. There are at least a handful of different options that you can choose from. Every single platform has different pros and cons. However, every company that has loan products, needs or can appreciate certain features. We will highlight just that – the most essential things for you to look out for. Taking into account the market changes amidst the pandemic, here are a few tips on how to find the best software for loan management!
1. Make sure your software choice is easy to launch and that you will be able to import historic data (if applicable)
2. User-friendly tools are much more efficient both short and long-term, so try to have a demo version used by your team to hear feedback
3. Integrated modules for quicker loan origination via brokers or dealers provide the tools to gain more benefit from generated leads
4. Automated insight generation will allow you to stay updated on current financial situations as well as avoid unnecessary risks by automating credit scoring
5. Modules or features for simplified loan modifications are especially useful during the unpredictable times of the pandemic
To sum up, the pandemic has greatly impacted the things that companies were looking for in lending software. Whereas before it, most financing companies were primarily focused on growing their portfolio and list of clients, the pandemic forced them to rethink their approach and look for flexibility and ways to adapt, in order to retain existing clients. By choosing mostly cloud-based, user-friendly software for their operations, businesses were able not just to prevent avoidable losses, but to also even make gains during this troubled time. So, if you want to achieve more success in the current business landscape, focus on flexibility and more automation as well as the added benefit of employing AI tools in your leasing business.