The old saying “If it ain’t broke, don’t fix it” sounds reasonable. Or how ‘bout, “Don’t mess with success?” — That’s another good one.
In the world of consumer loan servicing and collections, these are all too often mindsets that influence decision-making around technology upgrades. Some consumer lenders and servicers hang on to their “tried and true” legacy technology for years (in some cases well more than a decade).
I’ve been guilty of this when it comes to my word processing software — which turned into a situation where others couldn’t open my documents, and I wasn’t able to work smoothly across computer and online channels. So, not wanting to “rock the boat” of your current operating landscape is understandable.
Here are the biggest reasons companies fear updating their technology:
- It seems like its working fine. If you’ve let technology upgrades lag, you’re not alone, and it’s certainly understandable — especially if you your system(s) seem to be working just fine. Nevertheless, a “working” system can veil the many obstacles than can lie ahead if you sweep thoughts of modernizing and upgrading under the rug. The reality is, a system might be “working” but is it taking you where you want to go, keeping your business competitive and driving efficiency for your organization?
- Don’t want to disrupt the business. New and modern are great, but if it brings smoothly running systems to a halt, or wreaks havoc with customer relations and your business reputation, then it’s easy to see the process of upgrading as a big risk. The best technology providers will ensure a smooth transition with minimal disruptions to your business. Make that a requirement when evaluating technology partners.
- It’ll cost too much. New technology can be costly, but many organizations fail to closely evaluate the cost of sticking with legacy technology. How is your current system impacting your overall business in terms of efficiency, customer and employee satisfaction, operational performance and future-readiness? Take an in-depth look at each of those areas. New technology doesn’t have to come at a cost. Consider only those technology options that can move you forward across a spectrum of operational needs and functions. The right technology should save costs, improve your operating efficiency and enhance your capabilities to sustain your competitiveness.
- It will require too much training. Technology is becoming more intuitive, more user-friendly and more broadly capable. If you’re considering anything that isn’t, then question whether it’s advanced enough. A worthy platform should enable employees and reps to do their jobs more efficiently and handle tasks and training with more ease.
- Transition and implementation will take too long. For large-scale lending portfolios, many new systems can take years or more to fully transition and implement. The key is whether the transition can be smooth and organized end-to-end with minimal disruptions.
It’s a new ballgame out there — led by fast-evolving digital technology. Lenders sticking solely with their legacy system may feel “the devil you know is better than the one you don’t” (another good one!). But the call for a paradigm and mindset shift in loan servicing and collections is loud and clear.
Appreciate where you’ve been, but embrace the new advances out there. You’ll be surprised where they can take your business.
John Michael is a technology advisor for Conduent Loan Manager Solutions. Conduent’s powerful Loan Manager platform/interface is plug and play software with a modern API based architecture. It averages 99.999% uptime, a 3-4 month average implementation timeline, and includes 24/7 expert support. Conduent supports more than 11 million consumer loans and leases and manages more than $110 billion in consumer loan assets.
About the AuthorMore Content by John Michael