In the on-demand webinar below, Cornerstone Advisors’ Consultant, Michael Rempel and Merianlink’s Chief Product Officer, Chris Maloof discuss the state of the digital lending industry, the must have features of a successful digital lending operation, and what questions and concerns a financial institution should bring up when meeting vendors. Get a sneak peak of this on-demand webinar below.
Webinar Summary: Must Have Item in your Digital Lending Suitcase
As your financial institution embarks on a digital lending journey, or if you’re already well on your way, there are several items that are paramount to have in your suitcase. Does your organization have the proper loan origination system and account opening software to support your processes and goals? If you’re just preparing for your journey, be sure to include these crucial items. And if you’re enroute and you don’t have the following times be sure to stop along the way and repack.
Digital lending is a hot topic for every bank and credit union. Many are reevaluating their investments and taking a long hard look at their loan origination system and account opening system to ensure they can properly perform all digital lending needs. Many financial institutions are preparing to make a switch when it comes to their software in order to further expand their organization. And ensure that they are able to meet the growing digital lending demand that consumers have come to expect. According to Cornerstone Advisors research:
- 33% FI’s are looking to update their digital account opening system
- 24% FI’s are looking to update their loan origination system
- 18% FI’s are looking to update their digital banking software
There is a lot of competitive pressure within the industry as regional banks and credit unions no longer compete with the financial institution down the street, but instead with the most convenient digital lender. Not too long ago consumers used the internet to simply look up the nearest bank or credit union and maybe do some research on their websites. But now the competition is greater and often with a far larger technology budget. This digital demand by the consumer and big banks have created mass competition within the industry.
Having the right products within your lending suitcase is vital to the success of every bank and credit union. But the technology is just one piece of that success equation. There must be a cultural shift into a digital mindset. You do not simply implement a digital lending system and let it run on it’s on, there must be an owner of this process and there must be a strategy put into place.
Many successful digital lenders think of it in terms of building a solution and what they would add. This allows them to search for the right technology for their organization.The perfect product must tie into your strategy and bring it into fruition. Lenders should look for a combination of two things when talking to vendors. The first is, what products can they bundle together. And what third-party integrations does the vendor allow for.
Years ago, financial institutions opted for a one bundle approach. They attempted to run their organization simply by utilizing their core system. Then they moved into purchasing a loan origination system and new account opening system as well, often bundled by one vendor. As more tech companies emerge and claim they have something better and state that they are best-of-breed, lenders opt for a wide variety of vendors and products. There are several points to look out for if you’re thinking of diversifying your vendor pool. The first is, are you able to sustain that product? Do you have the investment that is required? Additionally, are these products able to integrate together to truly create an industry leading digital lending consumer experience.
Now it’s important to do your process diligence when evaluating a loan origination system, account opening system, or digital lending technology. An origination system is not a magic wand, there is a level of business processes and strategy that your organization must implement. Simply purchasing an origination system and hoping for success will not work and will not lead to a competitive experience.
Additionally, it is important to discuss with the vendor if the origination system is stable. Are there concerns about the organization that need to be discussed. Ask about the product roadmap and know what’s to come for the product. Ask the origination system vendor about the enhancements that were created within the last 6-months, to ensure the vendor is forward thinking and innovative.
Additionally, make sure that the product actually does what the vendor is claiming. It’s on you to verify that what the vendor is selling in-fact works the way you assume that it does. You wouldn’t buy a home without an inspection or a car without a test drive, don’t sign an origination system contract blindly. Be sure to sort out the following items with the vendor:
- Vendor Strength
This on-demand webinar is part of our Summer Road Trip Webinar Series. Be sure to check out the rest of the series and stay up to date on the latest in digital lending. Click here or below to learn more.