The increasing importance of loan management software amidst the pandemic
The Covid pandemic turned everything upside down. For businesses, the period of global lockdown caused a lot of concern and forced them to mobilize quickly. The asset finance sector was no exception. An increasing urge for digitalization pushed innovation and made businesses look for more cutting-edge digital solutions, including leasing and loan management software. Its ever-rising importance has turned some, even the most skeptical heads. In this article, we’ll gloss over how the pandemic gave way to the emergence of more modern and more versatile lending and leasing management software.
More flexibility for finance companies
The pandemic time showed that now it’s more important than ever before for a business software tool to be versatile and ready to change along with the business. Thus, a visible rise of new demands and wants from companies, looking to lease and/or finance purchases pushed the asset finance sector to innovate.
Flexibility is the new term that defines the new goal for businesses using lending software amidst the pandemic. To begin with, more and more asset finance companies, began offering flexible payment structures. Payment holidays, postponements, extended and longer overall contract terms became a more noticeable trend. This created a vastly increased demand for data management. Thus, businesses were leaning towards switching to the cloud from on-premises solutions only or adding a cloud-based software solution as a supplementary option. This was done as a base necessity to give staffs, who were now working remotely, access to the main databases and most important data on loan origination, processing, termination and other daily functions.
In addition, during the pandemic, cross-platform compatibility also increased in importance. It was always a nice bonus to have but a lot of businesses overlooked the value of being able to exchange data between one app and another. Right now, modern software solutions allow to, for example, integrate the lease accounting data with the general ledger quickly, with only a few clicks.
The all-new tendencies of customers
The pandemic showed that clients looking to finance have all-new tendencies and preferences. With more and more businesses facing uncertainty in their long-term future, financing options need to be flexible and adapted to the ever-changing macro and microeconomic environment of the present day.
We touched on this a bit in the previous paragraph, but let us go into slightly more detail. Right now, customers who are looking for financing, have a much tougher time trying to plan their expenses and revenues for the future. There are more first-time clients and the general macroeconomic state of the global economy also played a major role. What we get in the end is a situation where a lot of asset financing companies had to re-assess risk management and credit score evaluations because the wave of new clients had different demands. For example, payment holidays became a major request. Managing this new feature requires having capable digital tools as accounting for it manually would just take too much time. And if the company utilized digital lending software, it was going to have a much smoother transition and could meet those demands without too much worry.
One more interesting trend was the emergence of new financing options which forced finance companies to adapt. Local governments and international institutions (e.g. the EU) gave a lot of money to businesses in the form of subsidies or interest-free loans. For a while, they took businesses away from loan, leasing, and other financing businesses. This forced the latter to adapt to the situation, re-evaluate pricing plans, interest rates, etc. With the help of software, this could be done in the most efficient way possible, spending less time and finding the most efficient solutions for loan origination and/or loan termination with the help of CRM and ERP tools.
Furthermore, businesses began focusing not only on finding a working software for remote management of financing procedures, but also some specific software modules that could help ease the increased workload. SOFT4Leasing noticed an increased focus on modules like the self-service portal. It allows customers of financing businesses to receive and see all relevant information about their ongoing contracts, read updates, interact with the institution, etc.
A switch from Excel to high-end loan or lease management software
With the aforementioned new trends emerging, most organizations had to think fast. A lot of small and mid-sized financing companies were still saving costs by using Excel or basic calculators for their day-to-day data management. As the pandemic ramped up the difficulty of administrative process management (e.g. loan termination, sending out invoices, following-up on inquiries, etc.), organizations were forced to at least consider the implementation of lease management software.
As you probably know, Excel has very basic capabilities in terms of managing vast amounts of data. Large files or files with numerous different calculators embedded will just be difficult to interact with due to hardware and software limitations. It’s just isn’t enough. When comparing with tailored loan management software like SOFT4Leasing, you can clearly see the difference in terms of efficiency, flexibility and the possibility to optimize dedicated software to the needs of your organization.
To sum up, the pandemic period forced the leasing and financing markets to innovate and move towards digitalization. As the need for more sophisticated software solutions grew, along emerged an entirely new profile of clients while the priorities of existing ones, also changed. With the increased demand for flexibility, self-service and remote functionality, cloud-based software solutions took the reigns and grew in popularity. Since they can be implemented and launched almost ASAP, there’s almost nothing that could disprove the fact that in the current state of affairs, professional leasing management software is a must-have.