Imitation is often the sincerest form of flattery, but it can also be a trap especially when it comes to loan origination systems.
Anyone who has been in the credit union industry long enough understands a system that works for one institution isn’t necessarily a slam dunk for another. However, that doesn’t mean leaders should make decisions without regard for what works for similar institutions. Addressing the needs of the credit union’s loan operations should be your top priority. Try to not let the fanciest designs and flashiest options lure you in. Your main objective should be to find a practical solution that can afford you growth opportunities down the road.
The right loan origination system should be tailor-made to streamline operations and drive portfolio growth. Credit unions are unique and different from banks because they exist and operate to serve the needs of their members. Loan origination systems work the same way, which is why a cookie-cutter system is what you need to avoid at all costs.
Regardless of whether you’re in the market for your first loan origination system or looking to upgrade, there are generally five key areas you should focus on to get started.
- Understand what you want No one in his or her right mind would just stroll onto a random car lot without doing some research as to what types of cars are sold there and how they fit your needs. The same can be said for loan origination systems when it comes to matching your needs with the offerings or options of a particular system. In other words, substance outweighs style.
- Know your potential partner Look for more than a vendor. Look for a partner. The best vendors are the ones that are only happy if YOU succeed. Obviously, choosing a system is not like buying a pair of shoes where you and the vendor end that transaction at the purchase. There’s the testing, implementation, and execution phases of acquiring a system, so it’s much more than just a simple transaction.
- Think outside of your wallet Don’t sell yourself short by thinking the system alone will move mountains. When budgeting for the implementation and administration of your new system, it’s important to remember strong vendors have a history of providing more than just a system. Their experience with all kinds of institutions can also be a resource you can use to reshape your operations. Take advantage of their expertise by making sure you can afford it.
- Compliance, compliance, compliance You clearly want to opt for a vendor dedicated to maintaining compliance and regulatory obligations when it comes to a loan origination system. Your vendor should serve as a watchdog to update your system as needed with whatever features you need to stay compliant.
- Getting it live Credit unions, regardless of size, should always want the quickest turnarounds for the testing and implementation phases so they can hit the ground running. While you never want to rush and shortchange your staff on training, your Go Live date hinges on this timeline, so be sure that those expectations are as realistic as possible.
These five key areas are just the tip of the iceberg in terms of what you’ll need to consider before you decide on a vendor and a particular loan origination system. To find out more about the top 10 questions you should ask, please click on the button below to download Checklist: How to Select the Loan Origination System That’s Right for You.