Six Things to Look For in Loan Management Solutions
September 2016

Selecting the right loan management solution can be an imposing task.

Maybe you’ve come to recognize the power of analytics, and decided to make the leap from a manual, paper-based system straight to a modern platform, but the complexities of that jump have proven paralyzing.

Or perhaps you’ve realized the limitations of the time-tested approach of interwoven spreadsheets — or that your workhorse core processor doesn’t optimally manage the volume of critical information in your portfolio — but appreciate the value of your staff’s familiarity with the software and fear the learning curve of a new system.

You might have made the plunge into analytics-driven systems a couple of years ago, but sense inefficiencies and missed opportunities in the first-generation options and wonder whether better alternatives exist.

Certainly, not all loan management solutions are created equal, so you should be a discerning shopper. Your fundamental goal should be choosing a system that makes your job easier by creating greater efficiency and recognizing both risk and opportunity.

Aim to reduce the time you and your staff spend on areas such as data input, data analysis, report generation and compliance, so you can satisfy your internal operating procedures, your board of directors, and regulators, while concentrating your efforts on overseeing and growing your loan portfolio.

Every credit union and bank has specific concerns, but many needs are universal. For starters, seek these traits in a loan management solution:


Integrating systems always seems more difficult than it ought to be. Can you upload data to the loan management system you’re considering from any core processor? Does the system manage all your loan channels? Can you upload a limited number of data fields, or however many you find relevant? You need a multi-dimensional view of your portfolio, and the segments therein.


Simplicity is a virtue, not a vice. Wrapping sophisticated tools into easily navigable software is a recipe for success — just ask Apple. You want a powerful system that people with varying technological prowess can easily understand, reducing training time and increasing engagement.


Put your best foot forward for internal auditors and examiners by demonstrating an organized, thoughtful approach to managing your business operations. Find a solution that produces clean, definitive reports that show where and how your money flows, and allows for ongoing analysis of the complex variables that factor into regulations such as the Fair Lending Act.


Is all pertinent information collected and generated by your credit union or bank housed in the same place, accessible by and actionable for various departments who touch the lending process? Interconnectedness and interactivity pave the way for smoother communication, which leads to greater efficiency, which begets more profitability.


Market conditions change more rapidly now than ever before, which has prompted financial institutions to more highly value being nimble. Certainly, volatility in the post-recession economy has played a big role, forcing financial institutions to redefine risks and look for new opportunities. But so have technology, and the rise of regulation springing from increased Congressional scrutiny, most notably stemming from the Dodd-Frank Act. You need a loan management solution that can quickly respond to regulatory changes and the business climate, and one that is scalable to meet your ambitions for growth.


Shuffling actual files — physical or electronic — within your system is asking for trouble, especially if your credit union or bank is structured with any degree of complexity. A web-based solution allows staff in different locations to easily access all of your key data, with various Internet-enabled devices. It also guards against operational risks such as network outages and displacement due to disaster. Web-based systems also eliminate costly and stressful software upgrades.

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