Building Loan Management Software: Advantages and Who It’s for [Build or Buy Guide]

Building your own loan management software can be rewarding for certain businesses since it offers control and flexibility that pre-built platforms will hardly match.  

(This post is the 3rd chapter in our series ‘Build or Buy? An Executive’s Guide to Choosing the Right Approach to Loan Management Software’) 

This path demands a unique set of business attributes and requirements to truly succeed. If those aren’t in place, what could be a powerful asset might become a costly liability, draining your profits and human resources for years. 

Advantages of Building Loan Management Software

1. Customization and full control 

This is the biggest advantage. With a custom-built platform, you control everything, from features and functionality to the technology stack. This ensures the platform matches your unique processes and needs which leads to greater efficiency, and a strong competitive edge in your niche – if your niche is really unique and there are no standard solutions for it. 

2. Eliminate third-party reliance & enhance security 

Building your own loan management system minimizes dependence on third-party providers. This gives you full control over the platform’s operations while strengthening security. With no external parties involved, you can safeguard sensitive data and implement custom security measures that meet your unique requirements. 

3. Intellectual property ownership 

By building your own system, you retain full ownership of intellectual property (IP) rights. This means you have full control of the technology, allowing you to modify, update, and enhance it without relying on external vendors. This ownership gives you a stronger strategic advantage by keeping all parts of the technology proprietary and protected. 

Is Building a Loan Automation Solution the Right Choice for You?

Consider building your own lending management software if your business meets these criteria:

1. Competitive advantage 

Your lending processes are your secret sauce, your unique edge in the market. You don’t want to share that knowledge with anyone else, especially if your business model is built on proprietary lending methods or risk assessments. 

2. Unique business needs 

You’re a leader in your niche. And your business has specific requirements that no off-the-shelf platform can fully satisfy. You need complete control to design a solution that perfectly aligns with your unique operations and workflows. 

3. Unwavering commitment 

You’re absolutely certain that this platform is essential for your business’s long-term success. You’re prepared to invest the time, resources, and ongoing effort required to maintain, update, and adapt it as your business grows and the market evolves. 

4. Time requirement 

Building a custom solution is a marathon, not a sprint. It can take years to develop a truly functional system. In that time, the market can change rapidly, and you need to be confident that your custom solution will still be relevant and competitive when it finally launches.  

Did you nod when asked if your business meets the criteria listed above? Then, building is your way to go. 

Read the previous chapter on buying loan management software or skip to the insights from the CEO on buying or building lending software.

Prefer to read the entire guide at your own pace? Download it as a PDF version.