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    7 Requirements your Digital Lending Platform Must Have


    There is an urgent need for banks to digitize their services. Lending, which has always been banks’ essential source of profit, is now the frontier in this shift to digital banking. Against this backdrop, more and more banks are thinking about adopting a digital lending platform to embrace this trend. However, choosing a suitable one among numerous platforms out there can be hard.

    In this guide, you will find out about the seven top priorities - the key capabilities you need to consider for a successful implementation of the digital lending platform, and how to achieve fast time to market while ensuring regulatory compliance controls and risk management at your standards.

    Why Digital Lending Platform is important to banks

    Banks have many reasons to migrate their lending services to a digital platform. Nevertheless, the top reason is customer experience. Branch visits by banking clients had been progressively falling even before social distance regulations were implemented in the aftermath of the COVID-19 outbreak.

    Banks should expect these trends to go upward as their customer segments become younger, now mostly gen Z and Millenials. They are digital-first users and will continue to determine the way banks deliver their services. While there are customers who still prefer branch visits, banks need to introduce more digital channels for loan applications.

    In addition to these remarkable trends, there are additional arguments in support of adopting a digital lending platform, such as lower costs, faster loan processing, lower default rates, improved risk management efficiency, and stimulating growth in lendable and non-lendable company prospects. Another key advantage and tremendous economic benefit for a bank is the potential to offer a single application for various loan products that can be completely underwritten at the same time.

    Read more: Digital Lending vs. Traditional Lending: What are the differences?

    7 Key Requirements any digital lending platform must have

    Seamless Customer Experience

    Customer satisfaction is the key factor driving banks to use digital lending platforms. Today’s customers now demand seamless digital lending services that replicate the experience they have with super apps and eCommerce sites. Now that digital challengers such as fintech startups have entered the digital lending space, your digital lending platform’s efficiency and responsiveness are the key predictors of success. Borrowers now care less and less about the source of loans.

    This is critical since borrowers are now able to easily and rapidly search for many offers and are more inclined to accept the first one they receive. Therefore, the customer experience and success of your digital lending platform are defined by speed, range of loan products, and simplicity of use.

    Question to ask your potential vendors:

    • How long does it take, on average, for a client to finish the application process? 
    • Is it possible to set up the system to handle automatic approvals?

    Product Breadth

    It's vital for a digital lending platform to be able to handle numerous loan lines (secured and unsecured) across multiple geographies. The lending platform should evolve in tandem with the lending offerings.

    From Commercial Lending, Business Lending, SME Lending, to Invoice Financing and more, your digital lending platform should have the ability to handle all of your banks’ existing and future lending products. 

    Question to ask potential vendors: 

    • How simple and quick would it be to add new products to the platform after it is launched?

    Platform Flexibility

    The flexibility of your digital lending platform is equally important as its product diversity.

    Another requirement is to choose a digital platform that has microservice and configurable architecture, which can adapt to your institution's policies and preferences.

    This not only reduces the time it takes to launch and avoids the hidden costs of custom development, but it also gives you the flexibility you need to thrive in today's fast-paced world.

    For example, banks that were successful in launching the commercial lending product under difficult conditions were able to do so on the formal start date if they had the digital right lending platform in place.

    This enables banks to adjust the platform more swiftly to changing regulatory needs by leveraging current bank data, risk tools, and pre-existing platform interfaces.

    Banks who didn't have these platform capabilities when commercial lending originally started were either caught off guard when program regulations changed during the first two rounds, or were forced to return to manual and resource-intensive paper application processing.

    Question to ask potential vendors:

    • How are rule changes made? Can they be defined by the digital lending platform?


    Some of the most important aspects of a digital lending platform are risk mitigation and risk management. In addition, being able to evaluate at the portfolio level is only part of the picture. Market/crisis risk, as demonstrated by the COVID-19 crisis, has posed an unprecedented challenge to banks' risk management capacities, effectively paralyzing underwriting desks.

    Risk management in today's world demands a structured process to thorough monitoring throughout the whole portfolio, which can only be accomplished with digital capabilities, including constant access to client bank accounts.

    It's also vital to have customizable scorecards that allow for real-time customer profile assessment. Recent cash flow information paired with 3rd party data sources that ease the application and underwriting process must now be included in your scorecards.

    Real-time client evaluations are an essential tool for assessing risk profiles at the client level as well as across the portfolio during unexpected change in the business environment. As these unexpected changes occur, banks may immediately adapt risk policies and procedures in real time to account for changing risk factors.

    Question to ask potential vendors:

    • Is the platform capable of processing client cash flow data and incorporating this knowledge into risk decisions?

    Implementation Speed

    There are a lot of components to a digital lending platform, each of which requires different configuration. It's impossible to have a one-size-fits-all solution. You should seriously reconsider your vendor if it ever tries to pull out such an absurd idea.

    How fast you anticipate to launch your Digital Lending Platform in the market? This is one of the most first expectations you should make with your Digital Lending Platform provider in advance. Thanks to digital technology, speed-to-market has become a competitive advantage unlike any other. Even if it's just for a beta or trial period, you should set this launch date goal upfront to ensure your vendor doesn't have any misunderstandings about the importance of delivering on time.

    Question to ask potential vendors:

    • How long does it take on average for an implementation to take place?

    Ongoing Support

    A support plan is only as good as the people who operate it. Look for support that is operated by a team that has experience in the lending business. Commercial lending involves a high degree of complexity and domain expertise.

    You should seek out a company that has experience in a variety of commercial and business lending areas. It's critical that your platform vendor has extensive experience with data management, access, and management.

    Question to ask potential vendors:

    • What kind of after-sales service can you expect from the vendor? 
    • What value-added services will they offer during the platform's lifespan?

    Customer Privacy

    You should require SOC 2 and ISO27001 certification from your providers. SOC 2 is an auditing technique that assures your service provider securely maintains your data in order to preserve your organization's interests as well as its clients' privacy.

    SOC 2 compliance is a minimum criterion for security-conscious financial organizations when looking for a SaaS provider. Aside from technological and infrastructural security, your supplier must be able to comprehend and enable KYC and AML processes in real-time.

    This will guarantee that your financial institution is set up for success and that it can securely acquire new bank clients while adhering to internal compliance standards and minimizing risk.

    Question to ask potential vendors:

    • Do your digital lending platform have any security certification, such as SOC 2 and ISO27001.

    KMS Solutions' Digital Lending Platform: Embrace Digital Lending with ease

    At KMS Solutions, we provide end-to-end digital lending platform with pre-built products such as Business Lending, Commercial Lending, SME Lending, Invoice Financing, Lending Analytics. Having microservice architecture, all of these capabilities are easy to configure, so that you can embed them into your existing ecosystems with fast time-to-market while ensuring customer experience and security. Contact us for a Demo today.

    Learn more about our Digital Lending platform