Assess lending software fundamentals in a tough market

The auto loan industry has overcome serious challenges in recent years, adapting to overcome issues such as stay-at-home mandates and inventory shortages. And we are not off the hook yet: the market is now facing labor shortages, rising fuel prices, inflation and rapid interest rate increases, which always have an impact on sales. It’s an industry that’s proving resilient, and that’s largely due to increased adoption of automation.

The sustainability of the industry is even more remarkable given the pace at which change has occurred. Many lenders have adopted new technologies and business practices as quickly as possible. Few had the luxury of introspection or long-term research.

As we continue to face talent shortages, tight budgets and a potential economic downturn, it’s important for lenders to go back to basics and verify if their software really offers the capabilities that will keep them competitive. and effective as the market continues to evolve. A cutting-edge lending solution creates efficiencies, allowing lenders to optimize their talents and resources, and help them maintain an advantage even under difficult conditions. But not all systems are created equal.

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Save time with efficient software design

Lenders can now be in a better position to determine if their loan origination software (LOS) and loan management software systems are truly aligned with their needs. After all, lending software should facilitate the lender’s business goals; it shouldn’t hamper the efficiency of operations or slow things down due to design constraints.

Here is a checklist of what your solutions should offer for maximum benefit:

1. Does your lending solution support your lending process?

The automotive industry has always been siled and disjointed, and loan application processes have often followed suit, requiring a multitude of tasks, disparate applications, complicated documentation workflows, and cumbersome authentication processes. Automation should be designed to break down these silos, making your processes more transparent and simpler.

To that end, how much work do your employees have to do to make your lending software work? Is it complex and fragmented like the manual processes it was meant to replace? Or does it consolidate and streamline workflows, reducing additional tasks for your staff? To reap the full benefits of automation, software must combine tasks that were previously done separately and manually to save time, mitigate human error, and improve user experience.

If users need to move between platforms, such as third-party CRM systems, your automation solution isn’t doing the job. Integrations with top partners should be able to seamlessly provide features such as digital document storage, access to leading CRM systems such as Selling power and industry-leading analytics and compliance tools, all from a one-stop shop.

2. Does your LOS provide quick access to the right information?

All loan applications require specific metrics and indicators in order to quickly and accurately approve transactions and finalize funding. Your LOS should easily collect and clearly display the data needed for decision making. Speed ​​and accuracy are essential. The right information must be readily available – and prominently displayed – to users, otherwise the value of LOS software is greatly reduced.

For example, modern LOS solutions must not only quickly collect credit bureau data, vehicle values, histories and other indicators, they must also highlight potential problems or show that there is no has none. The goal is to make the decision as quick and easy as possible, keeping candidates engaged and preventing them from dropping out of the process.

This concept of “intelligent processing” uses artificial intelligence (AI)-based features that not only collect rich data from online sources, but also highlight key insights for users. The best approach is often a combination of good AI and a user interface (UI) that facilitates old-fashioned human intelligence.

3. How fast does your software respond?

The more clicks your LOS removes from the decision process, the more satisfying the user experience becomes, resulting in faster decisions, more deals booked, and increased profitability. If your LOS requires users to perform simple calculations and complete simple tasks, your system could slow down decision-making.

Equally important, you don’t want a system that slows down during peak hours or forces you to schedule reports and scans based on resource limitations. No one wants to be stuck with outdated, inflexible software, and cloud-based lending solutions can scale to support businesses of any size if designed well. It is imperative to choose a solution that is agile enough to support your growth without having to spend a lot of money and/or manpower to redesign a new system.

Lending automation solutions are expected to improve processes and save time for lenders and consumers. Now that the industry has become more comfortable with automation cloud-based infrastructure, it’s time to evaluate these systems to make sure they really maximize performance. This means looking at how much time users spend working or waiting on the system. The right solution can enable lenders to increase profitability while delivering the best possible engagement experiences, creating more revenue, and building brand loyalty today and tomorrow.

Sam Heath is the chief revenue officer of Inovatec Systems. Inovatec provides LOS, LMS, and direct systems that aim to eliminate friction in the loan process and automate much of the manual work of loan origination and management.

Auto Finance Summit, the industry’s premier event for auto lending and leasing, returns October 26-28 at Wynn Las Vegas. To learn more about the 2022 event and to register,