Choosing a lending software provider is a more delicate task than it may seem at first glance. You need to make sure you cover bases on each important aspect to make the right decision. But what is the right decision? The one that will guarantee an easy lending process in the end for you and your consumers. This is what an effective lending software must be: the one that makes tedious borrowing a no-brainer for consumers and (or) faster loan origination for you. You need to take care of everything to make sure you choose the right developer for this job. For the article, we composed a list of twelve essential aspects you need to focus on when choosing a development partner. We placed them in the approximate order you can follow. So, make sure to include them all in your checklist!
Make Sure you Covered These when Choosing a Lending Software Provider
Software Development Models
Your potential software provider may work on a particular development model or offer you several alternatives to choose from:
- Full-cycle development. You describe the functionality for the future product, and the developer performs the task you assigned to them. However, the model doesn’t imply that you create functionality and (or) business requirements documents. You need a truly professional development company for this role that can work based on drafts and oral descriptions rather than written documents.
- Requirement-based development. In contrast with the previous model, here, you need to create a functional requirements document (and possibly the business requirements one, too) before the developer can proceed to your product. For this task, you also need a seasoned development company, but, perhaps, a bit less skilled than in the previous case, the one who can accomplish it by relying on the documents you provide.
- Dedicated software and QA engineers. In the latter case, the entire product planning, from gathering requirements to drafting architecture and selecting the technology stack, is solely on your side. Here, you need a software developer who can provide you with programmers and testers rather than the whole development team with the product manager and business analysts.
At any rate, choose the model that suits you the best. See where you are now with your product — this will help you make up your mind about the model to choose.
To deliver a robust SaaS lending solution to the market, you need a developer who had previous experience working with that type of software. It’s highly advisable that the development team will have proficiency in integrating secure payment gateways as well as building other payment tools that compose a full-featured lending solution.
But your expectations here should be beyond tech implementation; besides it, the team should understand the differences between payment options to select the ones that are flexible and user-friendly.
At this step, you need to interact with your potential developer directly to evaluate their tech expertise “first-hand.” Choose the form of interaction that works best for you; it may be online conference calls, face-to-face meetings, or initial RFP sending.
What to evaluate? Initially, you need to consider the developer’s tech stack depending on the type of your future product: a web application, a mobile application, the one that requires cloud migration and (or) API integration.
- Mobile applications. Those inevitably come down to either Android, which requires the knowledge of languages like Kotlin and Java, or iOS, which, respectively, requires expertise with Objective-C or Swift. If you plan to develop a cross-platform mobile app, then you need developers who have good skills in such popular frameworks as React Native.
- Cloud platforms. Most likely, you will migrate your solution to the cloud, which will cut implementation times. An expert SaaS development company should have a good knowledge of popular cloud platforms like Microsoft Azure, IBM Cloud, and AWS.
- API integrations. Most likely, you will need to integrate an API into your lending software. Regarding API development, RESTful API is the standard. Besides this, you will need solid expertise with databases, which may include either SQL (MySQL, PostgreSQL) or NoSQL (like MongoDB) databases.
- Other languages. Depending on the features you want to add to your application, there may be other skills you may need in the process. For example, if you need to add automation features, most likely, you will have to find Python experts. Or, say, you need to add the analytics functionality, which, again, will require experience with Python, SQL and NoSQL databases, Tableau, Power BI, and other tools.
Rather than spending hefty sums on building a large application from scratch, a wise move will be to moderately develop your app and start with an MVP. A reliable provider will deliver you an MVP in a reasonable time so you can start generating revenue asap with considerably fewer expenses. Note that this application needs to be as small as possible, otherwise, you’re risking starting your lending business with huge losses.
Communication is essential to make the development process going, and one should not take this aspect for granted. Decide on the preferred communication channels with the development team before the development process itself starts.
Having agreed on communication means, decide how regularly the developers should provide you with progress updates on the product. Those will either be standups with everyone reporting on their part of the work or the team manager alone reporting to you on the total progress by the time of speaking.
Software Architecture Understanding
A demanded SaaS lending software is the one that has an intuitive and at the same time secure layer. The latter is particularly important if you work with a public API. Make sure to provide your app’s integrations with various APIs and components. Also, provide support for third-party developers to serve your architecture’s scalability and maintenance.
This can be achieved with the help of an experienced development company that has expertise with such architecture patterns as microservices and layers. To better understand the developers’ previous experience with these, conduct detailed sessions where you can ask them about how they implemented different patterns in different projects and how they made their choice of the pattern.
Now, let’s talk more about security. Your lending application should have access levels with controls that can be easily granted or revoked. Mind this as your app will process large amounts of sensitive information like credit card and social security numbers, address, name, and others, and only involved parties in the loan underwriting or disbursement process should have access to it. Besides this, your potential developers should know how to add two-factor authentication at registration as well as be familiar with such technologies as e-signatures, encryption, firewalls, and antivirus tools.
Division of Roles
The development company you will decide to work with should manage your SaaS product itself, besides managing the development team. The management transcends product launch and suggests the presence of at least the following roles:
- Product manager – a person who assigns tasks to developers and makes sure they meet deadlines and your expectations. If you choose one-to-one meetings on progress updates, product managers will be responsible for bringing you up to speed on each meeting.
- QA testers – these specialists ensure that each individual feature works as expected in any environment the user may work. They conduct tests that cover all possible environments, including different operating systems, browsers, and devices.
- DevOps engineers – responsible for cloud infrastructure management. Alas, only a limited number of software development companies have such specialists whose role is to ensure secure client access to cloud services.
When it comes to defining the architecture, get to the heart of things rather than leaving it entirely to the development team. The main question you should ask yourself here is: is the technology to be chosen perspective? In other words: is the course of action we take forward-looking?
You may release your lending software to the market, but the market has already changed its demands and expectations due to social, economic factors, or even force majeure like the global pandemic. Thus, the best way to secure yourself against unexpected surprises is to select a software provider who can develop a microservice architecture. In this way, you will be able to launch fast and scale as you go without any hindrances.
Your SaaS lending software can’t afford to have downtimes, otherwise, you will lose customers and money. More problems will follow if the downtimes result in data leaks so it’s imperative for you to select the right team to ensure all works uninterrupted.
Another important task you should delegate to them is stability maintenance upon releasing updates. Be ready to release frequent updates, where the assigned developers should know how to plan and implement each update without disrupting the work of the application.
Omnichannel and Cross-platform Strategy
Sure, you are a fintech lender, but that doesn’t mean you should limit your area of expertise to online lending. Instead, you may find your market in other segments like the underbanked and unbanked or, say, in rural areas and even societies. Devise your strategy to reach them across channels and devices and pick the right development team to ensure that for you.
As the number of loan providers grows, the regulatory bodies seek to protect consumers from the legal side. Ensuring your software is compliant is another crucial factor when choosing a development partner. Failing to comply with lending regulations may result in penalties and even suits depending on the severity of the violation. That’s why you should cover your bases legally by taking at least these three actions:
- Provide built-in compliance. You can integrate the most essential rules like TCPA and FDCPA into your lending application. It’s advised to allow for customizations so you could add new rules and change the existing ones as a part of these.
- Add rules that are specific for lenders. In other words, you should consider rules that are specific to your business model to build in your software.
- Leave audit histories. If you need to change any document somehow at any stage, then make sure you do that by leaving the audit history afterward. By specifying when the changes were made and by whom you make the process clear and transparent to everyone hence reliable.
With the right lending software, you can still retain the market and reduce the pressure of regulations and COVID-19 consequences. Faster and intuitive processes and built-in compliance and the two swords with which you can even beat the battle for consumer’s attention. And you can deliver a solution that has these step-by-step, minding each of the aspects we discussed today.
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