A Buyers Guide to Small Business Lending Software

August 7th, 2017

lending-8-7-17.pngIs digitizing your small business lending a priority for your bank? Increased efficiency, profitability, productivity and enhanced customer experience are all reasons why it should be. For example, in most banks the administrative and overhead costs to underwrite a $50,000 loan and a $1 million loan are essentially the same. Wouldn’t it be great to free up your team to focus on the most important thing—the customer—and let the technology take of the rest?

Here are nine questions to ask when you start talking to fintech companies that sell small business lending software:

  1. Is the software able to conform to Americans with Disabilities Act (ADA) standards and best practices? According to the American Bankers Association there have been over 244 federal lawsuits since 2015 that have been filed alleging that people with disabilities are denied access to online goods and services in violation of ADA. The Department of Justice, the agency charged with ADA enforcement, has delayed website accessibility regulations until 2018, but can your bank really afford to wait?
  2. Does it improve the borrower and banker experience? It’s not enough to digitize your applications. What your small business lending software must do is improve your current process for everyone by offering a well thought-out and well-designed user experience that’s intuitive, reduces end-to-end time and helps increase profits.
  3. Will it use your bank’s credit policy? Black box credit policies should be a thing of the past but they still show up in loan origination software. Find a technology that respects the bank’s risk profile and reflects its credit criteria and corporate values.
  4. Does it offer an omnichannel application and borrower portal? Borrowers want the ability to start and finish an application on your website any time of day or night, either on their own or with the help of their banker. Look for a technology that doesn’t eliminate the banker-client relationship, but rather, enhances it.
  5. How quickly will it fit in with your current workflow? The goal should be a quick and seamless transition from paper to digital, but sometimes there isn’t a straight line. Perhaps your financial institution desires the ability to digitize the application process but still wants to manually control the underwriting and spreading process. Look for a platform that has the ability to grow with your workflow and is designed in a way that accommodates your approach to using technology.
  6. Are they a partner or a competitor? More and more alternative lenders are starting to see a benefit in partnering with banks. But will you find out later that your ‘partner’ is competing in your own back yard for the same loans you are trying to acquire through them. Find a platform that’s in the business of helping banks, not replacing them.
  7. Does the platform provide actionable analytics? The platform’s analytics must be able to provide banks with insight into their loan program that is almost impossible to track manually. Find a platform that truly maximizes the data collected by, or generated from, the technology to provide rich analytics like pipeline management, process tracking, customer experience feedback and exception tracking. This will enable managers to manage better, sales people to sell more effectively and customers to be more fully served.
  8. What are the fraud detection and prevention resources used to keep you and your customers safe? As your bank offers more digital options, criminals will devise more sophisticated and hard-to-detect fraud methods. Your bank should only seek a technology partner that has security at the top of its priority list.
  9. Will it be easier for borrowers to complete applications, and for bankers to decide on and process applications accurately and efficiently? The goal for most banks wanting to implement a small business loan origination platform is to reduce end-to-end time, increase profits and give both customers and its own staff a better experience. Make sure the software is designed with this in mind. It should be simple and intuitive for perspective borrowers to use, and it should lessen the time bankers have to touch the loan, freeing up both front and back office teams to maximize their productivity.

Your institution is unique, so you’ll need to find a technology partner that celebrates that individuality rather than changes it. Use these questions as a foundation from which you can fully explore all of your options and find the partner that will bring you the most value.

mdillon

Mike Dillon is the national sales director at Akouba.  Mr. Dillon brings more than 30 years of financial services expertise to Akouba, most recently running North American Small Business Sales for BMO Harris Bank.

ambersmith

Amber Smith, director of marketing at Akouba, is a marketer with over 13 years of experience. She has a keen interest in the digital world and was one of the first participants in Duke University's digital media and marketing program, one of the most comprehensive, online media marketing programs in the nation.