With changes in technology, new options are becoming available to users of loan origination systems (LOS). The most advanced, feature-rich, and cost-effective LOSs’ are now starting to leverage the cloud for what is popularly known as Software-as-a-Service (SaaS). These LOS solutions are making businesses more competitive—and, as many in the industry already recognize, staying competitive has become an uphill task with the need to consistently deliver a better experience along with mounting margin pressures. SaaS LOS provides a sigh of relief that the modern loan origination industry needs in the era of digital.
How far behind the SaaS LOS curve is your organization? One rough-and-ready way to estimate where an organization is in its SaaS journey is to review SaaS costs per employee. While SaaS spends vary, based on the size of an organization and number of employees, one study found that in 2018, the average SaaS subscription cost per employee (across subscriptions) was $2,884[i].
While LOS specific SaaS spends are indicative of how competitive you can expect to become, the smart LOS user is asking more pertinent questions:
The SaaS-based LOS of the future
While achieving business goals is top priority, lenders also aspire to have a seamless, paper-free, fully digitized, end-to-end lending process that brings down costs and meets the growing complexity of regulatory requirements, all of it while delivering a state-of-the-art borrowing experience to borrowers and lenders alike.
An equally important requirement would the ability to integrate the sprawling loan ecosystem for services that range from credit ratings, appraisals and fraud checks to default management.
Our experience from implementing NetOxygen’s SaaS-based best-in-class lending technology to fast-growing lenders suggests that an intelligent, future-proof LOS must be marked by three distinct characteristics:
Don’t settle for less: Go for outcome-based pricing
SaaS-based LOS providers offer a variety of pricing models that make business sense as they are based on optional features and actual consumption (users don’t have to pay a fixed price for a solution or an application). However, lenders should aim to lower their risk further. Our recommendation to achieve this is to opt for a provider who offers a commercial model that is additionally based on outcomes.
While the most visible and obvious benefit of SaaS-based cloud-hosted LOS is that it eliminates a dependency on hardware, software ownership and maintenance, lenders know that it is the ongoing costs that need to be managed. Ultimately, that is where the game is going to be won or lost. However, operational savings must not come at the cost of reliability, performance and customer experience.
For lenders who are debating a LOS change, the time to take action is now. New cost-effective solutions are placing greater power into the hands of lenders and buyers. If you are still running a dated LOS, you could be missing out on substantial savings and on building a strong base of happy customers with each passing day.
To understand how to upgrade your solution, make it feature rich and get more for what you pay, get a demo of our award winning NetOxygen SaaS LOS.
Director of Sales at Wipro Gallagher Solutions.
Sandeep Hinduja is director of sales at Wipro Gallagher Solutions. Sandeep is a seasoned sales professional specializing in insight-based, consultative solution selling. Proven track record across sales management, sales consulting, marketing, relationship management & account management.