12 Features That Makes A Loan Management Software Outstanding 2019

                         12 Features That Makes A  Loan Management Software Outstanding!

Digital Lending Report, November 2018, by the Boston Consulting Group (BCG) projects that with the introduction and penetration of India Stack (UPI) in the banking system, 50% of the loan seekers with internet access tend to buy loans online. 

In fact, out of the total population, there are about 55% of consumers with a digital footprint out of which an astonishing 23% purchase retail loans digitally today. 

Loan ticket sizes influenced digitally are found to be marginally higher by 4% in the case of SMEs. In short, the report concludes that Indian Digital Lending is a $1 Trillion Opportunity over the next 5 years! 

One of the major factors that facilitate such humongous growth is that technology has allowed for a reduction of time in processing loans. 

People no longer have to wait for months to get credit. The report studies lending models of various companies, and the average time of processing an application and disbursing loans, when everything is done digitally, in just 10 minutes! 

With such concrete data, it becomes absolute that every lending company needs to go digital. It all starts with identifying a reliable loan management software partner that can understand the nuances of your business, and blend in seamlessly with your existing operations.

Here are a few filters that any software you are considering for your business must go through - 

• Personalized to your requirements 

Though technology has become sophisticated, one shoe size cannot fit all. The software should be able to customize itself to cater to the peculiar requirements of your business operations, and moreover the specific needs of all of your consumer segments. 

• Coming-of-age Tech Infrastructure

  The software should command the least coding expertise from your end. It must encompass modern tech-stack such as API gateway, SOA Enabling, etc. and possess a cloud-based infrastructure for utmost cybersecurity. It should be able to accommodate futuristic technology such as open-bank architecture and update itself without hampering existing operations. 

• Scope for Innovation 

It should be able to pilot new products/services in a relaxed environment. There has to be a defined structure of introducing and implementing new products, services, or processes with minimal effort and time.  

• Fulfill Legal Compliance's

The software should be legally-compliant at all stages of the lending cycle. Implementing appropriate taxes, interest rates, invoice discounting, and other norms as directed by the RBI should be automated.

• User-friendly for Employees & Consumers

 A good loan management software with all its high-end integrations at the back-end, shouldn’t be complicated to be used by the employees and the consumers. A neat lag-free and easy-to-understand user experience and interface are what the software should provide.

• Comprehensive reporting & analytics

The software should be able to fulfill not just current business requirements i.e. the short term goals, but also help the business work upon their long term vision with data-backed reporting and intelligent analysis. 

• Smart Intelligence and Automation 

The software should deploy artificial intelligence to automate the majority of the manual tasks at a lower cost. Automation will make the entire lending cycle secure by eliminating the scope of errors and frauds. The AI-backed analysis will help the company understand its current and future growth prospects. 

• Ease of Delegation 

Even though automation will take care of maximum manual processes, you still need people to handle the overall management. The software should be able to easily introduce, modify, or change the hierarchy and allow for a confusion-free automated delegation of responsibility at each stage of the cycle. 

•  Integrated Accounting engine

Accounting has always been a tedious affair. However, with improved lending operations, if the software offers automated accounting solutions, and allow for seamless integration of other accounting services that a company might use, it would lead to a transparent and error-free accounting process. 

•  Set pre-defined rules

The software must offer scope to implement automated rules for individual products, services, and stages of the lending cycle through a rule engine that will lead to a risk-free efficient workflow without the need to constantly monitor the operations. 

•  Automate Debt Recovery and Collections

Though debt recovery and collection is the end of a lending cycle, it involves various sub-processes in itself that can be completely automated. From sending personalized reminders to customers about due dates to Geo tagging to accepting payments digitally and raising receipts, everything should be automated and regulated by a loan management software. 

•  Reliable Customer Service

Even with all its merits, the software system might face issues and you might need assistance with it. The software company should have a skilled and able customer service that is quick to respond to your queries and resolve them.

Now when you start looking for a reliable loan management software partner, we hope it passes through all the filters we laid out.  By the way, we at All Cloud offer a comprehensive full-suite lending solution that delivers on all of the above features and much more.

You can check out our solutions here - AutoCloud Enterprise-Loan Management Software

RBI Guidelines For NBFC | KYC Guidelines For NBFC 2019

RBI Guidelines For NBFC

RBI Guidelines for NBFC enhance the safety, security and operational efficiencies of all NBFCs the RBI has issued directions on the ‘Information Technology Framework for the NBFC sector’ on June 08, 2017.

• While evolving technology ecosystem and enhanced dependence on technology, analyzing the risks associated with legacy systems and inefficient IT management the Central bank is pushing for better planning and management of Information and data of NBFCs.

• Taking a holistic view of IT and its importance the guidelines include suggestions on Business Continuity Planning, robust IT Framework, Policy formulation, and audit.

• The directions apply to non – deposit taking NBFCs – NBFC SI and NBFC Non-SI. The RBI has very strategically called for all NBFC to form a committee with Senior Management to lead and take a holistic view of the current IT infrastructure, Design and Deploy a sound IT policy that considers requirements, risks and rewards for the company.

• Today Non-Banking finance companies are driving the growth of the country by serving the underserved and unbanked with their extensive network and sound customer engagements. Their growth and profitability need to be linked with the acceptance and implementation of a good software to manage their customers and loans.

• With the evolution of technology from Server to Cloud, desktop to Mobile and DOS to Android a large gap has been created. 

• Many businesses are still dependent on redundant and obsolete hardware's and software like Loan Management & Loan origination systems that fail to capture and process information that is relevant today. 

• Importance of Data and its interpretation of business insights is unchallenged, companies that use data to its advantage are more successful and profitable than those who depend on incompetent systems.

• NBFCs possesses very critical and confidential data whose security can be compromised. 

• The guidelines stress that ‘Information is an asset to all NBFCs and Information Security (IS) refers to the protection of these assets in order to achieve organizational goals’ and very rightly it has advised the NBFCs to frame an IT & IS Policy that considers Confidentiality, Integrity, Availability & Authenticity.

• NBFC should consider developing a system that is safe, secure and smart, a system that not just controls risks but is cognitively advanced to avert risks. 

• Providing access to information to users based on need, creating responsibility of actions by Business Process Management enabled applications, ensuring physical and virtual security of data and maintaining proper audit trails will help them in maintaining data Authenticity & confidentiality.

• Cybersecurity and Cyber crisis management is the most pertinent topic that needs to be addressed while considering IT & IS. 

• With the world over the internet, it is a staple that cannot be avoided. 

• Mobile technology and the sharing of information on multiple systems and locations that enable businesses to harness the power of technology need to be secure. 

• Data needs to be transferred and stored with utmost powerful DB management tools, securing data with multiple firewalls and hosting the data at secured Data Centers like AWS, MS Azure or other cloud data centers should be evaluated for their merit.

• NBFC big or small should invest in a good IT partner that can advise and help them establish a controlled and dynamic environment for growth. 

• With the evolution of cloud technology and secured Data Centers where multiple Data backups and instances can be stored are very useful in creating a sound Business Continuity Plan. 

• Disaster recovery experts are betting on the cloud that promises a very aggressive response time in case of any incident.

• Technology and its optimum use will be the most important growth drivers for any business and in such businesses where data is the only asset you have, and this makes technology the most profit center to invest it. 

• With a robust application, Management can monitor day to day activities, map data derivations to policies and invest time in growth.

• The RBI with these guidelines has created a 2 point agenda for the NBFC one that stresses on Importance of IT & IS and other impresses upon them the importance of the use of IT. 

• With the highest authority making an open call for IT readiness all NBFCs should conduct a comprehensive analysis of their current software and be ready for the future. 

Reference:http://bit.ly/2CxvtAX

Top NBFC’s In India 2019 | List of NBFC Companies

List of Top 9 NBFC Companies In India 2019

Top NBFC in india that are offering a variety of services. A company registered under the Companies Act, 1956 engaged in the business of Loans and advances,acquisition,shares/stocks/bonds issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase
construction of immovable property.

According to research and studies, NBFC’s in India are outperforming banks. NBFC’s in India are playing a major role in the financial sector contributing 12.5% growth in India’s GDP. People are preferring NBFC’s over banks as they find them safe, efficient & quick in assisting with financial services.

List of non banking financial companies in india.

HDB Finacial Services

Power Finance Corporation

        Bajaj Finserv

Mahindra & Mahindra Financial Services Limited

                   Muthoot Finance Ltd.

Cholamandalam Investment and Finance

Shriram Transport Finance Company Limited

Loan Origination Process Steps | Stages of Lending 2019

                                           7 Stages In Loan Origination

Loan Origination Process Steps is the most important & critical stage in the complete Loan servicing of Lending/Financial services.

The Finance Industry is now shifting its focus on Customer engagement & Satisfaction with the elements of design & delivery that fulfills customers’ expectations first.

 For almost every lender the definition of the term Loan origination is different – where it starts, the different stages within the process and where it ends. Every Loan type will have a different approval process that can be manual or automatic.

Lenders have their “secret sauce” when it comes to Loan Origination that they never want to share as Loan origination is what makes Companies stand out from their Competition.

Loan processing System is responsible for managing everything from pre-qualification to the approval of funding the loan.

Loan Origination Process steps:

1) Pre-Qualification Process : 

This is the first step in the Loan origination process.

At this stage, the potential borrower will receive a list of items they need to submit to the lender to get a loan.

This may Include :

 • ID Proof / Address proof: Voter ID, AADHAR, PAN CARD
 • Current Employment Information including Salary slip
 • Credit Score
 • Bank statement & Previous Loan Statement
 • Tax Returns Once this information is submitted to the lending company, Lender reviews the documents and a pre-approval is made, allowing the borrower to continue in the process to get a loan.


 2) Loan Application :

This is the second stage of the Loan origination process.

In this stage, the borrower completes the loan application.

Sometimes this application can be paper-based, but today lenders are shifting towards an electronic version that makes this stage Paperless.

New technologies allow completing the application online through website & mobile app, and collected data can be tailored to specific loan products.



 3) Application Processing :

At this stage, the application is received by the credit department and the first step done by the department is to review it for accuracy, genuine & Completeness.

 If all the required fields are not completed, the application will be returned to the borrower or the credit analyst and they will reach out the borrower to procure the missing information.

Lenders use LOAN ORIGINATION SYSTEM (LOS) to know the creditworthiness of the borrowers.

A good LOS will help a lender setup workflows to process a loan. It can automatically flag files with missing required fields, return it to the borrowers and notify sales/Credit department to rework.

Depending on the organization & product, exception processing might be a part of this stage. Loan Origination Software.


4) Underwriting Process :

When an application is totally completed, the underwriting process begins.

Now Lender checks the application taking a variety of components into account: credit score, risk scores, and many lenders generate their own unique criteria for scoring that can be unique to their business or industry.

Nowadays, this process is fully automated with the help of a rule engine & API integrations with Credit scoring engine (CIBIL, EXPERIAN etc. ) in LOS. In a rule engine, the lender can load underwriting guidelines specific to products.


 5) Credit Decision : 

Depending on the results from the underwriting process, an application will be approved, denied or sent back to the originator for additional information.

If certain criteria don’t match according to the rule engine set in the system, there can be an automatic change in the parameters, such as reduced loan amount or different interest rates.


 6) Quality Check :

Since lending is highly regulated, the quality check stage of the loan origination process is critical to lenders.

The application is sent to the quality control team, that analyze critical variables against internal and external rules and regulations.

This is the last look at the application before it goes to funding.


 7) Loan Funding :

Most loans fund shortly after the loan documents are signed. Second mortgage loans, Business loans, Loan against property and lines of credit may require additional time for legal and compliance reasons.

LOS can track funding and ensure that all necessary documents are executed before or together with funding.


 Checkout AutoCloud- Loan Software for lenders to know how it can help you enhance customer experience and let you customers get loans in less than 5 mins.

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