Four Key Factors to Consider When Selecting a Lending Platform

Online application systems should be easy to access, and relevant details such as interest rates, loan options, loan amounts, or repayment periods should be readily accessible. Responsiveness and productivity may make or break the decision of the business owner to apply for a loan.

Fremont, CA: The banking environment continues to change. Relationship banking and brand loyalty, the strong banking characteristics in the past, have gradually declined over the years. Bank consolidation remains a powerful theme as global banks find benefits in economies of scale. The cost of maintaining branches and in-person staff shall exert constant pressure on the industry. Customers regularly use their smartphones and computers to satisfy their private and professional needs, leading to significant changes in small business lending.

Here are four key factors to consider when selecting a platform:

Product Diversity

Safe, unsecured, Small Business Administration (SBA) loans, working capital, line of credit, term loans, or how many loan products the financial institution provides, the capacity to administer them should be an integral part of the decision the lending platform. The willingness to carry out new products as the needs of your financial institution shift should also be kept in mind. A program like PPP is a reminder to all lenders about how quickly you need to move when the competition is strong, and consumers feel its urgency. Your lending platform should provide as many online lending options as your bank offers in the branch. You might choose to launch some products online to get started, but don't select a system that won't allow you to add more products easily in the future.

Security and Privacy

It needs to be noted that security should always be a pillar of every commercial lending company. At the very least, a provider should be accredited SOC 2 compliant. SOC 2 is an audit mechanism that extends to every organization that holds consumer data in the cloud. An organization that complies with SOC 2 will have stringent policies and procedures to protect sensitive consumer data such as bank account information and credit scores.

Risk Management

Risk management is one of the most dynamic elements of corporate lending. Make sure that the platform will integrate all of the risk management criteria. The online lending platform can provide a real-time evaluation, whether of a particular client or an entire portfolio, including cash flow details. Your business lending platform should be able to easily modify risk policies and rules due to changing risk parameters.

Smooth User Experience

The internet, by now, has become a ubiquitous part of our everyday lives. Business customers are used to accessing the web in their personal lives and are more likely to expect a consistent experience in achieving their tasks. An unintuitive, clunky loan process for prospective borrowers can push them away to other financial institutions. Although pleasant aesthetics are certainly a bonus, a substantial user experience should go beyond looks. Online application systems should be easy to access, and relevant details such as interest rates, loan options, loan amounts, or repayment periods should be readily accessible. Responsiveness and productivity may make or break the decision of the business owner to apply for a loan.

See Also: 

Business Management Review 

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