Negotiating with Loan Origination System (LOS) Vendors
Negotiating with loan origination system (LOS) vendors can be a long process for companies looking to improve their lending operations. Like selecting a car, identifying the wrong vendors becomes much easier when you know what to look for. This guide will help you with loan origination vendor selection.
Initial SaaS Filtering Criteria
The world of loan origination systems is large. Many options don’t meet the basic Software-as-a-Service (SaaS) requirements for lenders. Before asking specific questions about the loan origination solution, it’s important to set general quality standards for any technology you consider:
- Pricing Structure: Ensure the vendor is clear about any extra charges based on user count, portfolio growth, hidden fees, or contract length.
- Cybersecurity: Prioritize strong cybersecurity measures to protect sensitive data, not just a flashy interface.
- Regular Updates: SaaS solutions must receive regular updates to stay current with industry trends and evolving technologies.
- Support & Training: A good LOS vendor should offer clear training and fast technical support to build trust as a financial services provider.
- Track Record: Look for references and success stories that show how the vendor treats its customers.
While these criteria are crucial, choosing the right loan origination software needs more attention to specific features.
Loan Origination Vendor Selection Must-Haves
When choosing a loan origination system, these features are key for meeting your goals:
- Loan Application Flow Configurability: Select a system that allows you to quickly adjust the loan application process to keep up with changes in the market.
- Real-Time Application Processing: Automating the scoring and decision-making process in real-time boosts borrower satisfaction and helps you stay competitive.
- Scalability: The LOS you choose should grow with your business. It must handle larger portfolios without slowing down operations. Vergent LMS is a great example, as it serves millions of borrowers worldwide.
- Innovative Credit Product Development: Choose a system that supports innovation. It should enable quick creation and launch of new, fully automated credit products.
- Credit Scoring Accuracy and Flexibility: Use AI-driven Decision Engines to improve credit scoring accuracy. This allows you to make better loan decisions and reach a wider audience.
- Keeping Up with Industry and Regulation: Your vendor should offer regular platform updates to help you keep up with industry trends and regulatory requirements.
- Supporting Digital Credit Beyond Loan Origination: Opt for an end-to-end lending automation system that covers all aspects of consumer and commercial credit. This will provide a smooth borrower experience.
- Reliable Uptime: Select a vendor known for reliable uptime to reduce financial losses from system downtime.
- Borrower’s Self-Management Capacity: Improve the borrower experience with a simple interface and clear communication. A personalized online portal allows borrowers to manage their loans themselves.
- Time-to-Market for Initial Release and Updates: Speed is key. Look for providers with pre-configured solutions to bring products to market faster. For instance, Vergent LMS offers implementation times three to five times faster than competitors.
Conclusion
In conclusion, carefully evaluate your options when selecting a loan origination system. The LOS you choose should meet your specific needs and help your business grow in the fast-changing lending industry.
