Lenders Need More (And Less!) than Off-the-Shelf Software Delivers

January 25, 2022

In a recent blog post, we addressed the question of whether lenders should choose an off-the-shelf or custom CRM solution. Here, we’ll go into more depth about why one-size-fits-all tech solutions often don’t deliver the ROI that they promise for lenders. Most of the reasons stem from three truths about the industry:

  1. Lending is highly specialized work.
  2. Most lenders are competitive at least in part because of a “niche” or specialty they’ve developed over the years.
  3. Off-the-shelf software rarely accounts for the above two realities.

Read on for a clear sense of how off-the-shelf software solutions can limit your capabilities and a sense of how custom solutions or customized add-ons can help you thrive.

Integrations with Your Tech Stack

If you’re like most lenders, you probably implemented your tech stack – POS, LOS, CRM, etc. – piecemeal over time.

That may work for a while, but after a certain point, if you’re using off-the-shelf solutions, you’ll likely find that you have data siloed in multiple systems that don’t connect and that your LOs spend too much time navigating from one system to another, entering information more than once, and otherwise not selling.

Keeping these systems in sync is also a major challenge. Each new tool or platform you introduce adds a potential opportunity for translation error and duplicate data. And every time an off-the-shelf vendor releases an update, you have to invest considerable time to ensure that the implementation didn’t break anything in any of your connected systems.

When lenders get to this point, it may be time to look to custom software or customizations for your existing solutions. This might manifest in a few ways:

  • First, there are ways to customize the software you already have. For example, maybe your telephony system could benefit from skills-based routing software so that you can ensure that each lead goes to the LO best suited to closing that lead.
  • Second, you can have a custom solution built. If you’re ready to adopt a CRM, for example, or replace what you’ve got, you could partner with a software development firm to build the exact solution for the work your organization does.
  • Finally, you can develop a golden record to unify data from your various software solutions. This helps streamline operations by ensuring that data exists consistently throughout your organization and that if it gets changed in one place, those changes flow through everywhere.

Without some degree of customization, it’s unlikely that the various components of your tech stack will integrate well. That is, the various systems will likely be unable to “speak” to each other efficiently, meaning your LOs and other employees will spend valuable time tracking down information from multiple sources.

Put differently, custom and customized solutions can integrate with the various tech platforms you’re already using. Because of that, they help create a streamlined, end-to-end experience for LOs. This saves them time and lets them do their jobs much more efficiently.

Custom Features that Give You an Edge

Every lender has a specialty. Maybe it’s a process a star LO developed years ago that you’ve been teaching LOs to implement since. Maybe it’s a follow-up strategy that helps you re-convert former clients. Whatever your niche is, off-the-shelf software won’t help you make it better.

Nor would you want it to – if it did, it would help every other lender using it in the same way, which would undercut your edge.

This is where many lenders see significant value in custom software: while it may let them do many things that an off-the-shelf solution would also enable, custom tech also makes it possible to carry out unique functionalities that are either key to a lender’s operations or essential to the unique value they offer customers.

Whether those functionalities are customer-facing (e.g., buttons that let borrowers view and interact with various pricing scenarios) or internal (e.g., APIs to pull in bank statements and income from the likes of Plaid), they can make a big difference to your users’ experience, your employees’ productivity, and your bottom line.

No Bloat

Just as important as what off-the-shelf lending software doesn’t offer is what it does. For many lenders, that’s bloat.

Consider this: a recent study of leading cloud-based software providers found that as many as 80 percent of features don’t get used. Eighty percent! That means, when you choose off-the-shelf software, you’re paying for the vendor’s development team to sit around building, enhancing, and maintaining features that your LOs will never click into.

That’s an unacceptable use of funds for most lenders, especially given that, because of long feature request queues, the features they do want (and, frankly, those they need to run their businesses effectively) may never see the light of day.

This is particularly true for lenders using software sold to businesses in multiple verticals. Lenders are rarely these vendors’ biggest customers, which means their requested features may never get implemented.

For Best Results, Go Custom or Customize

For most lenders, building a tech stack is a necessary task that isn’t within their core expertise. That’s why it’s so important to understand what existing tech solutions for the industry offer.

In many cases, that includes a frustrating mix of functional limits and functional excess. For right-sized – and right-shaped – technology solutions, most lenders have success with custom-built solutions or custom add-ons to what they currently have.

If you’d like to learn more about what the right software might make possible for your bottom line, get in touch.

Author: Mark Hansen
About: Mark Hansen is chief product officer at NTERSOL. For more than two decades, he’s been developing digital solutions for mortgage and real estate. In his current role, Mark combines his deep industry and technical knowledge with his communication prowess to solve clients’ thorniest problems and make sure everyone involved is on the same page throughout the process.