The materials available in this article are for informational purposes only and not for the purpose of providing legal advice. You should contact your own advisors with questions regarding the consumer loan origination software content herein. The opinions expressed in this article are the opinions of the individual authors and may not reflect the opinions of MeridianLink, Inc.
A 60% decrease in average funding time, a 20% increase in pre-qualified cross-sell opportunities, a 90% bump in efficiency, a 500% increase in application volume in just one month, and consolidating six lending systems into a single platform. These are the kinds of results that come from investing in the right technology.
Nearly half of financial institutions list growing loans as a top strategic priority, yet many still struggle with challenges that a modern consumer loan origination software (LOS) can resolve. Things like manual, time-consuming tasks that lead to errors and slow down loan processing, inefficient workflows that increase operational costs, decisioning delays that frustrate borrowers and hurt competitiveness, poor data accessibility that stifles decision-making, and fragmented systems that create inefficiencies and higher maintenance costs.
If any of these pain points sound familiar, it’s time to consider your options. But where do you start?
In this blog, we’ll walk you through the first three essential steps to help you plan your LOS upgrade effectively and set the stage for future-proofing your lending operations.
Step 1: Identify Your Stakeholders
The foundation of a successful LOS evaluation starts with assembling the right team. A well-rounded buying committee ensures that all key perspectives are considered and that you secure buy-in across your institution early in the process.
Who should be on that team? Start by considering these key roles to ensure you’ve got all your bases covered:
- Chief Lending Officer (CLO): Aligns the LOS with the institution’s lending strategy.
- Chief Financial Officer (CFO): Evaluates budgetary impact and return on investment.
- Chief Information Officer (CIO) or IT Director: Assesses integration requirements, security, and technical compatibility.
- Loan Operations Manager: Examines workflow efficiency and impact on daily operations.
- Compliance Officer: Ensures the LOS meets regulatory requirements.
- Consumer Lending Manager: Evaluates usability for consumer loan processes.
- Chief Risk Officer (CRO): Provides insights on risk assessment and management.
- Branch or Consumer Experience Manager: Considers frontline impact and borrower experience.
- Legal Counsel: Reviews contract terms and regulatory compliance.
- Vendor Manager: Conducts risk assessments and manages vendor relationships.
- Training and Development Manager: Assesses training needs for staff adoption.
Depending on your institution, the CEO or Board of Directors may also need to be involved in the final decision. Make sure to define their roles early to avoid any delays down the road.
With everyone aligned strategically, your team will be set up to move forward confidently in selecting a LOS that meets both your short-term needs and long-term growth goals.
Step 2: Set Business Goals & Requirements
Once your team is in place, it’s time to define your goals. This is the stage where you identify your pain points, set clear objectives, and proactively identify roadblocks for selecting the right system.
Tap into the vast knowledge and subject matter expertise of your stakeholders and ask…
- What’s our target timeline? Defining a clear timeline will keep your project on track and prevent unnecessary delays.
- What’s our budget? Knowing your budget helps prioritize solutions and ensures you don’t overspend.
- What are our current pain points? Understanding your inefficiencies will allow you to focus on the must-have features that solve your biggest challenges.
- What goals do we want to achieve? Align your LOS selection with your strategic objective for measurable success.
- How will we research potential vendors? Evaluating vendors through references, reviews, and demos will help you make an informed decision.
Remember to consider flexibility and scalability when selecting your solution. Your institution’s needs will evolve, so it’s essential to choose a system that can adapt to future demands and shifting market conditions.
Step 3: Build Your Foundation for Evaluation
Now that you’ve clarified your needs and goals, it’s time to establish a structured vendor evaluation framework. This process ensures that you can effectively compare different solutions and select the one that best meets your operational needs.
Here are the key factors to consider:
- Has the vendor worked with your current system? This ensures compatibility and minimizes integration challenges.
- How does the LOS support operational needs? Evaluate automation, AI capabilities, workflow configurability, and user experience.
- What is the total cost of ownership? Looks beyond licensing fees to consider implementation, training, and ongoing support.
- Is the LOS cloud-based or on-premise? A cloud-based solution offers greater scalability and security. So, the answer to this question can dictate your IT requirements and provide insight into the system’s ability to grow and adapt as your organization evolves.
- Does the LOS integrate with your core system? Seamless integration reduces manual tasks, eliminates data discrepancies, and boosts overall efficiency.
- How will success be measured? Define performance metrics so you can track optimization and ROI over time.
This thoughtful approach can equip you with the knowledge you need to minimize risks, maximize scalability, and drive sustainable growth.
Laying the Groundwork for Lending Success
Upgrading your LOS is a significant investment that requires a strategic, well-defined approach. By engaging the right stakeholders, setting clear, measurable goals, and establishing comprehensive evaluation criteria, your institution will be primed to choose a consumer loan origination software that enhances your competitive advantage.
In our next blog, we’ll dive into the top 8 non-negotiables for assessing your vendor’s technology, share best practices for conducting demos, and guide you through performing a cost-benefit analysis so that you can make a decision that will drive your institution’s future.
Want to jump ahead to the next steps for selecting a consumer loan origination system? Download the full eBook and your interactive workbook below!
