How LendingPoint Solved the Build vs Buy Conundrum

Alternative lenders today are disrupting the lending ecosystem by providing innovative solutions to those  who are currently undeserved by traditional banking institutions. These online as well as marketplace lenders...

Darpan Saini 10th November 2015

Alternative lenders today are disrupting the lending ecosystem by providing innovative solutions to those  who are currently undeserved by traditional banking institutions. These online as well as marketplace lenders are transforming the lending experience, providing borrowers quick access to credit, convenience and ease of use. Technology forms the core ingredient for these lending platforms defining their success in the industry. In fact, alternative lenders consider themselves as technology enabled financial platforms and consider the quality and agility of their infrastructure platform as their top priority.

Since time to market is critical, these lenders need to decide the key factor while choosing a technology – whether to build or buy their solution. LendingPoint, a leading direct lender, faced a similar challenge while starting their operations and thoroughly considered their options before deciding to build or buy their solution. Led by Franck Fatras, an experienced technology trailblazer in the financial sector, LendingPoint compared the cost and challenges of building their own platform vis-a-vis buying a commercial software solution based on following parameters:



  1. Time to market– LendingPoint wanted to launch quickly in the market, and understood that the speed of delivery for the system can make or break their success. They realized it would take 12-18 months to build the application in-house while commercially available solutions such as Cloud Lending Solutions could help them get to market in 90 days. Lenders need to decide based on how quickly they need to go live making loans, and must consider the cost of not getting to market quickly.



  2. Scalability and flexibility – LendingPoint wanted a solution that was customizable and scalable, allowing them to focus on their secret sauce. They wanted a solution that fits their business requirements and not the other way around.



  3. Total cost of ownership– The total cost of ownership while building the solution in-house was high since it required creating a support team for development, upgrade and maintenance. On the other hand, buying the solution meant that the vendor provided constant upgrades, maintenance  and technical support.



  4. Reinventing the wheel – LendingPoint did not want to make the same mistakes that have been already figured out. Building the solution in-house meant the development teams could face surprise challenges which could lead to delays. It made more sense to buy from a seasoned vendor with wide experience in implementing the solution and a regular upgrade release cycle



  5. Security– Security was of paramount interest for LendingPoint. Building the solution in-house meant investing heavily in security whereas third-party vendors have dedicated data security resources and are in compliance with all safety guidelines and industry standards.



Based on these considerations, LendingPoint decided to buy the solution and evaluated several technology options. They found Cloud Lending Solutions to be a potential partner that met their key requirements in addition to being flexible, robust and secure. With a highly configurable open architecture, we developed an end-to-end loan management solution from origination and funding, to servicing and collections in 90 days. However, our solution offered more than just a lending platform and provided various benefits to the client.



  1. Full integration across platform to offer a  seamless customer experience across channels such as website, inbound and outbound calls



  2. Agility to integrate proprietary decisioning engine to support real-time changes



  3. Responsive 24X7 support and partnership to enhance the customer journey



  4. Flexibility to quickly configure new product and service offerings



With Cloud Lending Solutions, LendingPoint was able to get to market in 90 days and  scale 20X so far. LendingPoint’s loan processing system has not only been tested and proven, but has also experienced rapid, scalable growth and refinement to accommodate an ever-increasing number of funded customers.


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