Key Features of Your Digital Lending Platform

Updated On : July 2022

Lending has always been a bank’s vital source of revenue and it has become an urgent necessity to digitize their services. While banks adopt a digital lending platform, there are certain key features or capabilities that need to be considered while shortlisting an LMS

As the global lending industry grows at an incredible pace, the are several factors that are responsible for this meteoric rise including digitization and automation. According to Business Research Company, the global lending industry grew at a staggering CAGR of 14.8% from 2020 to 2021, and is expected to reach over $8809.55 billion by the end of 2025.

These figures cannot be supported manually with legacy systems monitoring loan portfolio and managing operations from borrower onboarding to repayment. Moreover, customers today want customized financial products at a moment's notice and this is only possible by leveraging a modern lending software.

Banks have numerous reasons to move to a digital platform with customer experience being the most important. Loan applicants are younger and being digital first users, they will continue to determine the way banks deliver their services. In addition, banks gain from a digital lending platform with lower costs, faster processing, lower default rates, better risk management capacity and the ability to offer a single application for various loan products.

Here are some of the key features to look out for in a digital lending platform.

• Customization
  The customer today looks for customization in every aspect, including the lending solutions offered. It is crucial for banks and lending organisations to have customized offers to suit the exact requirement of the borrower. Customization ensures the customers’ needs are effortlessly met and business processes are streamlined perfectly. It is important for the digital lending platform to support configuration to be able to meet the unique business needs of the lenders and the borrowers.
• Integration
  With the old legacy lending systems, each software worked in isolation and on only one part of the entire lending value. These were responsible for the slow and inefficient value chains. A digital lending platform with automation technology is designed to have all complimentary interfaces effortlessly communicating and collaborating with each other. For example, today, digital lending systems can perform both consumer onboarding and underwriting thus making the entire process faster and more efficient.
• Regular Updates
  With the advent of cloud architecture, location & connectivity are no longer constraints and lenders are moving to cloud native lending systems which provide consistent updates from the developer at regular intervals. With remote access the developer can effortlessly update newer versions of the software, ensuring consistency in operations.
• Automated Processes
  Legacy lending systems were dependant on manual completion of processes with repetitive tasks, which reduced the efficiency of the entire operation. Digital lending solutions seamlessly automates an increasing number of tasks through the entire lending value system. This decreases the turnaround time of the final deliverable and ensures the maximum performance of the system.
• Breadth and Flexibility
  An efficient digital lending platform is able to handle numerous loan lines across multiple locations. From commercial lending and SME lending to invoice financing and more, a digital lending system is able to handle all of the lender’s existing and future lending products. Another feature is flexibility which helps to adjust the platform quickly to changing regulatory needs by leveraging current bank data, risk tools, and pre-existing platform interfaces.
• Risk Mitigation and Management
  A digital lending platform can handle risk mitigation and risk management. An unprecedented market or crisis risk in today’s world requires a structured process for thorough monitoring throughout the entire portfolio and constant access to client bank accounts, which is only possible with digital capabilities. Also, real-time client evaluation is necessary for assessing risk profiles during unexpected change in the business environment, so that lending institutions can immediately adapt procedures and risk policies in real time to counter the risk factors.
• Seamless Customer Experience
  Customer satisfaction is one of the key features of a digital lending platform. Today’s customers are used to excellent online apps and eCommerce sites and demand seamless digital lending services. An efficient lending platform is defined by speed, a diverse range of loan products and easy usability and handles automatic approvals. There are a lot of factors that lead to the success of a digital Lending platform. Besides the above features, an end-to-end platform with prebuilt products and a vendor providing excellent after sales service, can ensure a competitive edge in the market.

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