In the world of non-bank lending, making the right choice for your loan management system can make all the difference to your organization’s success. The age-old dilemma of building your own solution leveraging Excel, versus buying, implementing, and adopting a pre-built solution is challenging for any industry. Many companies follow the same journey from spreadsheets to eventually embracing an easily customizable loan management solution that strikes a balance between efficiency and scalability.

Organizations typically begin with some form of custom application development. Most start by building out a more robust Excel-based development system, complete with custom macros and bespoke formulas and reporting. However, at the end of the day, this is still an Excel-based system, with the same challenges previously noted.

That’s when organizations try building a completely custom solution. This involves either in-house or outsourced software development resources hired to build, implement, and maintain a bespoke solution built for your organization’s needs. Custom development allows ultimate flexibility and personalization—from field types to automation, to data integration, you get exactly what you need. For lenders with truly unique loan management offerings, this could create a competitive advantage.

However, custom application development, while allowing for automation and better data integration, isn't without its challenges either. Building a custom loan management solution can be time and resource-intensive:

• Taxing Time and Resources: Developing a custom system from scratch is a time-consuming and resource-intensive endeavor. It can divert your focus from your organization’s core lending activities, thereby hindering growth potential. Would you rather hire employees to maintain your custom system, or to interact with your clients and scale your business?
• High Maintenance Costs: Custom systems require ongoing maintenance and expertise to keep them up-to-date and compliant with industry standards. This adds a layer of complexity and costs that you might not anticipate when evaluating the initial cost of a pre-built solution.
• Risk of Over-Complexity: Custom systems can sometimes become overly complex in their automation and integrations, resulting in a steep learning curve for your team. New team members may struggle to adapt to intricate, custom-built interfaces and processes.