It took almost 15 years, amid countless stops and starts — with a few surprises and scares in between — but web-based applications at last have hit the financial services mainstream on both sides of the proverbial teller counter.
Just as consumers have overcome early concerns about functionality and security to embrace digital banking from a user’s perspective, so have credit unions and community banks realized the advantages in efficiency, security, consistency and flexibility realized by shifting to web-based applications, including loan management software.
Financial institutions will spend $3.2 billion on cloud services by 2017 — up 28% from their 2014 expenditures, according to Aite Group research. The percentage of credit unions that rely on the cloud will more than double in that span, per the results of a Credit Union National Association survey, and by then more than 60% of banks worldwide will process the majority of their transactions in the cloud, according to the research firm Gartner.
Clearly, forward-thinking financial institutions have recognized the competitive advantages gained by moving to the cloud. And while this fundamental shift will affect all aspects of the operation, lending’s position as the prime determinant of profitability makes web-based loan management software a particularly worthy investment.
Consider these advantages of web-based software over traditional systems:
The cloud’s plug-and-play capability allows lending staff to focus on their core duties, eliminating troublesome delays due to technical matters such as installation and upgrades. Web-based software vendors assume those responsibilities from in-house information technology (IT) departments that in most organizations already are strapped. That represents two-pronged cost savings. Also, simplified data distillation and report generation make it easier to remain in compliance.
The explosion of data breaches last year underscores the difficulty of protecting a complex system with a multitude of access points backed by servers that handle a multitude of tasks. And then there’s the issue of data portability. Laptops and USB drives containing sensitive information routinely fall out of the chain of control, and sometimes are outright lost — even a federal examiner fell victim last year. With the cloud, information is stored on dedicated servers, and regular backup and multiple redundancy ensure it’ll remain confidential and secure.
Workforce and workplace changes have significantly changed the operational dynamic. More employees work remotely than ever before, either because of their personal schedules or greater emphasis on meeting members in the field. Likewise, traditional branches aren’t dead, but they’ve been transformed to encourage greater interaction with consumers. With web-based loan management software, the world is your workplace, and the information you need is available on whatever device best suits the situation — desktop, laptop, tablet, or mobile phone.
Likewise, web-based software mitigates operational disruption in the event of a disaster that hampers or blocks access to your physical offices. Preserving entire business days during recovery efforts not only represents excellent member service, it prevents a cash hemorrhage. Also, looking at agility from a scalability perspective, cloud-based software is well-suited to grow as you grow, with extra volume addressed simply by adding more server space.
Accessing loan management software online means you’ll get the same experience anywhere, anytime, rather than dealing with newer or older versions of a program depending on the equipment or site. That’s an especially important factor at financial institutions with large fleets of machines and multiple branches, or those that have recently acquired another institution that might have used a different system. Also, integration between web programs is easier to attain than pairing a cloud-based system with proprietary software.
Contact the team at Visible Equity today to learn more about our web-based loan portfolio management options.