The last time you built (or rebuilt) your loan origination software platform to launch a new lending product, you swore it would be the last time you touched a project like that. What could be worse, right? Managing the project, dealing with complicated workflows with missed deadlines one after the other… what a mess. And the risk to the business: incredibly high! This has been the norm across the industry for decades, though it doesn’t have to be today. Although many FNI lending customers choose a full “rip & replace,” building a new solution across the entire business, our preferred approach is to take the next loan type and do it right. Today it usually makes sense to build out, not up, and introduce new capabilities in bite-sized chunks, then do it again. Leave that old LOS alone and expand over time simply and easily on the new platform with no disruption, no big risk, and with a simple path to increased automation and more satisfied customers.
Think Modularly, but Build Integrated Lending Products
Launching a new lending product outside of an existing LOS system doesn’t have to mean that it’s on an island; entirely separate from reporting, data integration, and previously designed workflows. This just doesn’t work. It is critical for lenders to make the most informed decisions based on all data available at the time. Consider the next build as a lending ecosystem where the new platform can leverage your existing riding on top of your previous investments. There is no need to recreate; instead, simply leverage and improve. Building “out” enables and turbo-charges your existing capabilities at a fraction of the cost, making modern technology and lending approaches accessible, as well as increasing automation.
This modular approach to launching new products has more benefits than just exploring the benefits of new technologies or dabbling in machine learning. New lending products built on freshly laid platforms can be more attractive to borrowers. After all, new features focused on application capture and workflow can enhance the borrower experience while providing value for lenders as well.
Arcady Lapiro of the Forbes Finance Council writes about the ever-increasing demand for modularity and customized experience among borrowers.
“From a customized product suite, a convenient interface and control of their experience, modular banking gives financial institutions large and small the ability to accommodate the wants and needs of all customers.”
Explore Without Settling: The Innovator’s Sweet Spot
Building a segmented, but integrated new lending product allows for lenders to make smaller technology and time investments with all of the benefits of a full organizational rebuild. Modern accessibility to internal and external data (and accessing this data with little-to-no effect on other integrated platforms) gives lenders of any size the same flexibility as an agile entrepreneur more than ever before. It is now possible to build a brand new lending product in days or weeks, without impacting existing platforms, creating a rapid accessibility to real-world testing of new decision strategies, workflows, and overall platform speeds.
Continuing to innovate with little technological repercussions puts lenders in a sweet spot for continuous learning, market research, new product development, & competitive advantage. While continuous innovation is a major benefit to building “out,” what you do with successful platform innovation is where the true power lies. Learned intelligence can be applied to previously untouched lending products in approachable phases for a smarter, more powerful, full product suite over time.
Phased Overhaul for a Slower Moving Business
Even smaller finance organizations perceive fast change as an impossible challenge. Building a new product as stand-alone (but data-integrated) provides an opportunity to see innovation in one segment of lending and make enhancements to the full platform over time—when scheduling and budget permits. Once your new product or products have seen real-world time in the market, it may seem logical to take what you’ve learned from this “sandboxed” environment and make more vast, organizational changes.
This is where building “out” meets building “up” and your investment continues to pay off. Take what you’ve learned from an initial separate technology investment and apply it to your full organization with few surprises, efficient costs, and shorter production windows.
Ready to launch a new lending product but not sure you want to overhaul your whole existing system? Build “out” with the suite of lending products and trusted team at Financial Network, Inc. Take a no-commitment, short product tour today to get started.
While we keep an eye on what’s coming next, and continue to stay educated and prepared to push the fintech industry forward, the loan origination software experts at FNI will keep providing insights and, of course, providing hands-on and high-level service to our loan origination platform partners. If you’re ready for direct access to decision strategy management and more, talk to a loan origination expert.