Decisions Blog

What You Need to Know About Integrating with LOS and LMS Software

Banks and lending institutions are expanding their financial products to include lending solutions and terms that can be customized to the individual borrower. This is a response to the ever-expanding ways consumers and businesses are seeking to borrow money for specialized products, but these institutions are hitting roadblocks when it comes to their current lending technology.

Legacy loan origination system (LOS) and loan management system (LMS) software is built to handle specific use cases and to guide loan origination and management through strict processes that were designed to support conventional lending practices. This technology becomes a pain point when lenders seek to work with unconventional borrowers looking for specialized financing, or even retailers using a direct-to-consumer model that doesn’t neatly check all of the boxes required in traditional LOS.

The best way to address these shortcomings is by integrating these LOS and LMS solutions with a business process management solution that can seamlessly incorporate business rules and decisioning software into these workflows. Here are some of the key benefits lenders should be seeking from this integrated approach.

Complex Data Requires Complex Rules Capabilities

With ever-increasing access to valuable lending data and better data analysis tools that leverage machine learning for deeper, more valuable insights, lenders are eager to upgrade risk modeling and other aspects of traditional loan origination. Unfortunately, traditional LOS and LMS solutions don’t offer that flexibility, which is why an integrated approach is required.

Lenders should seek out a business rules and workflow solution that harnesses data for better lending insights and optimized, personalized lending products. This includes the ability to build advanced risk and pricing models, use scorecards and verification workflows to address custom use cases, and enable online document management and e-signature collection to provide faster, more flexible service to customers.

By expanding your ability to use and manage this data, you can implement a truly modern approach to lending that lets you adapt on the fly and serve your customers’ ever-changing needs.

Workflows Can Be Improved, Not Replaced

Lending institutions may not love every last detail of the LOS and LMS software they’re currently working with, but that doesn’t mean they’re ready to ditch those solutions altogether. And, at some institutions, leadership may not even be open to that idea.

A better and less disruptive approach for those organizations is to adopt a workflow and business rules solution that can be integrated with the current LOS and LMS software. This lets finance companies upgrade workflows in specific ways without forcing a sea change that alters every aspect of loan origination and loan management, which would require additional training.

Individual stages of a workflow can be improved by addressing some of the current limitations that don’t account for specific use cases or leave space for processing specialized loan requests, such as for solar power equipment. Those customized tasks and steps can then be seamlessly integrated into the existing workflow, providing the flexibility organizations need without a wholesale switch to new workflow technology.

No-Code Development Enables Fast Responses to Changing Needs

Suppose the government offers a new lending program that provides incentives for businesses investing in green technology for shipping fleets and other aspects of operations. At least in theory, this offers an opportunity for lenders to capitalize on new business by providing loans related to this program. However, there are often significant obstacles to clear.

This type of government program likely has its own requirements that need to be met during the loan origination process. In addition, the terms and other features of the loan may be unique from other loan products and unaccounted for in traditional LOS and LMS software. By integrating with a no-code decisioning software, lenders can quickly build no-code processes and tasks that specifically address these new needs and integrate them into lending workflows to quickly support new lending opportunities.

An Agile Approach to Lending

Rigid approaches to lending don’t work for today’s borrowers. They need more customized lending products to meet specific needs, and they want to work with lenders that can offer them personalized products and terms. Traditional LOS and LMS solutions can’t do this on their own—but by integrating Decisions into these frameworks, your organization can combine old with new to modernize your lending capabilities with minimal disruption.

Learn more about the power of combining Decisions with lending software in our guide, Beyond Loan Origination Systems.

Loan Origination Systems