November 1, 2011 : Technology: Friend or Foe?
Author: Devon Cohen, President, EPIC Loan Systems
The late Steve Jobs, with his creativity and innovation, changed the way we think about and use technology. Today consumers and businesses alike look to the Internet, and even mobile phones, not only for entertainment and communication purposes but also to shop and handle various financial transactions. These transactions include shopping, various banking activities, payments, and even applying for credit. The trend is largely due to the speed and convenience the Internet offers. While the use of paper checks declines rapidly, growth in online transactions continues to climb.
In the short term lending space with both OLA and FISCA in October, we see many Storefront Lenders investigating either starting up or moving to an Internet Lending Operation. There are also new faces entering or gathering information to enter the space at this time each year. While storefront growth continues to decline, growth in Internet Lending remains strong. An Internet operation is a different animal, so to speak, than a Storefront Lending business and comes with it's own set of business challenges.
Today technology is important to all of us and to the Internet operator, technology plays an important role. When it comes to Internet Lending, technology can truly be a friend or a foe. This technology, or Loan Management System, is the central hub of the Internet lending business. It handles and houses customer data. It handles the use of internal and external data to make decisions. It handles areas of compliance, which can be a moving target in this space. It handles communication with customers and assists in managing employees. For these reasons choosing technology or making a decision on new technology is one of the most important decisions an Internet operator will make.
Internet Lenders, in many instances, rely on purchasing leads for loan volume and automated processes. Often a lender only has seconds to decide whether to purchase a lead or not. Setting up an automated process means trusting your technology to have the steps and options available to make automation successful and profitable. For a storefront operator entering the space, automation can seem quite daunting! Furthermore, a lender's technology is a factor in how effectively one can manage key areas of an Internet lending business.
Internet Lenders have more technology options available to them than ever. While start up budget is often a consideration in new businesses, data migration and the associated cost is a concern with experienced lenders. With both acquisition costs and Fraud are on the rise, Today's Lenders must take a more analytic approach to managing their portfolios. Implementing powerful technology with robust features and tools can reduce acquisition costs, better manage fraud, improve conversion & retention rates, increase collection rates, reduce data costs, and maintain a compliant operation. Simply stated, implementing the right technology can significantly increase ROI. Bad decisions, some that may seem a bargain initially, can quickly become costly and time consuming.
There is a profitable route to the Internet! Make sure your technology is a friend and not a foe in your Internet Lending Business.
For additional information contact Epic Loan Systems at info@epicloansystems.com or 1-877-305-EPIC.
About Epic Loan Systems: EPIC Loan Systems is a company established by a consortium of seasoned lenders in the payday loan industry who sought to improve upon existing technologies that lacked what online lenders needed to effectively manage their businesses. EPIC is a loan management and lead marketing platform that helps lenders reduce acquisition costs, and more effectively manage their portfolios.
About Devon Cohen: Having previously worked with KPMG, Merrill Lynch, and as a Group Executive with HSBC, Mr. Cohen brings extensive experience in Financial Services to Epic. In addition Mr. Cohen has a wealth of retail Internet experience. As CEO of FordDirect, Ford's retail internet division, Mr. Cohen restructured Ford's Internet presence significantly raising internet related sales from 2% to 9% of all sales in two years.