Why the right time to change your loan management system was yesterday

In conversations with lenders the topic invariably turns to compliance and regulatory change. Not surprising, perhaps, given that lenders operate in an environment where change is constant, the bar for transparency is rising, and operational resilience is under ever-closer scrutiny. 

This challenge isn’t new: adapting to regulations will always be part of the lending landscape. What is new is the pace of change and the operational strain this brings. 

Lenders today must have an acute understanding of their products, ensure suitability to evolving customer needs, maintain value for money, and track every step of the borrower journey — from application through to arrears, complaints, and beyond. On top of that, they now have a heightened obligation to capture and utilise meaningful data, while serving a borrower demographic that continues to shift and grow in sophistication. 

Add to the mix high-profile industry cases of the past (PPI, motor commissions, GAP insurance), and the growing influence of consumer complaints on industry practice. The result is a fundamental, non-optional need for adaptability. 

And yet, for many established lenders tied to legacy systems, adaptability is exactly what’s missing. 

When we first talk to a prospective client, there is usually a presenting problem — something tangible that’s driven them to market. It might be a product launch the current system can’t support, or a weakness exposed by a regulatory audit. Sometimes, something more catastrophic. 

However, when we start exploring the broader context, the root cause often emerges: adaptability, or more accurately, the lack of it. A lender’s ability to respond quickly to both compliance obligations and competitive pressures is almost always at the heart of the conversation. 

Compliance pressures aren’t going away. Today’s Consumer Duty requirements have evolved from previous initiatives such as Vulnerable Customers and Treating Customers Fairly (TCF). Before that, the COVID-driven payment holiday schemes were something no lender had experienced but had to accommodate at unprecedented speed - to name just a few recent examples. 

Every new regulatory requirement knocks innovation projects off track because, with finite resources, compliance always (rightly) absorbs capacity first. 

For lenders with rigid LMS platforms, compliance-driven change is often slow and complex. Where the core platform can’t flex, manual workarounds or off-system interventions are often layered in — creating a tangled system of fixes and complex processes that are harder to control and risks reducing operational resilience. 

As more components are added, they just become another point of dependency – creating greater risk of reduced operational resilience. The more fragmented the architecture, the heavier this risk becomes.  

Yet, over time, these inefficiencies normalise. Processes that could be streamlined remain untouched because “that’s just how we do it.” They only reveal themselves when an external shock forces the business to step back. 

But here’s the irony: those small, persistent inefficiencies are the big event. The longer they go on unnoticed, the more they accumulate over time, eroding agility.  

Lenders often wait for a clear catalyst — a regulatory deadline, a major market shift, a customer-impacting outage — to justify the investment in a new LMS. The problem? There’s always something else demanding attention. 

The analogy we often use is starting a health kick. Waiting until Monday to start your new regime because no-one wants to start on a Friday, or making a wholesale change in time for a holiday, rarely delivers sustainable results. You burn out, cut corners, and revert to old habits eventually resigning yourself to “do it properly next year”, and then repeating the same cycle the following year – we’ve all been there.  

In the same way, waiting for the mythical “right time” to overhaul your LMS won’t get you very far. It can be easy to fool ourselves into thinking we’ll have more time in the future, but the reality is that if you can’t make time now, things won’t be different in the future. 

If you start today and give yourself the time to thoughtfully invest in technology that strengthens your ability to meet both compliance and competitive challenges, you’ll see meaningful results sooner than you think. You’ll uncover and address inefficient routines, and ultimately build a solution that is sustainable, adaptable, and ready to scale with your business. 

If you genuinely have no capacity now to review processes or spot inefficiencies, that’s a signal in itself because it means you may also be missing risks that could already be detrimental to your business.

If you’re already layering fixes, pausing innovation to deal with compliance, or maintaining parallel systems because your core LMS can’t adapt — you’ve already missed yesterday’s perfect moment to change. The next best time is now. 

Changing on your own terms before a crisis forces your hand is always the less risky, less costly, and the less disruptive route. The lenders who get ahead of inevitable compliance shifts will be the ones free to innovate, compete, and serve their customers best. 

The “right time” won’t just happen. You have to create it, and we can help. 

Contact our team today to book a demo.