What Is a Core Banking System? 

When it comes to managing, prioritizing, and adopting new banking technologies, there’s an awful lot to consider lately. From endlessly evolving digital transformation strategies that may include complex cloud migration initiatives and API-based integrations, banks, credit unions, and other financial institutions are tirelessly confronting a rapidly changing financial services landscape. While exploring new opportunities around cloud technologies and other financial innovations is essential to modernizing—and critical to reimagining the consumer banking experience for the future—there’s one element of a financial institution’s infrastructure that remains stubbornly central to its business operations: the core banking system.

A core banking system is a backend software system that financial institutions use to maintain customer accounts, process daily banking transactions, manage investments and deposits, process loans and mortgages, perform interest rate calculations, and post transactional updates to an internal accounting system’s general ledger. With the ability to connect to multiple banking channels, a core banking system provides the technology for financial institutions to offer financial services and products through a network of branches, brokers, ATMs, online banking, and mobile banking apps.

As the central underlying component of a wider core banking platform, this type of legacy banking system is generally built on a monolithic architecture, where the entire banking application uses one code base and combines all its functionality into a single, cohesive software package.

Due to the inherent constraints of this design, core banking software are often complex and not easily configurable, making it difficult for financial institutions to introduce new products or update existing ones. Changes to one component can have wide-ranging effects on the entire system, requiring extensive testing and system-wide updates.

That’s no longer sustainable. Financial institutions are under increasing pressure to embrace modernization. The rise of open banking, real-time payments, and fintech partnerships means that outdated, rigid systems can no longer meet market demands. New technologies, competition, and business models are pushing banks to evolve, improving customer experiences and making banking more flexible.

Modern banking technologies must be adaptable. The ideal core banking system should support integration and interoperability—particularly as the industry moves toward open banking, where financial institutions must connect with third-party providers, including account information service providers (AISPs) and payment initiation service providers (PISPs).

Replacing core banking systems with modern platforms is a challenge. With higher complexity comes higher risk, and replacing a system that has been operational for decades involves risks related to business continuity, regulatory compliance, data security, and legacy dependencies. This is why many financial institutions are choosing to modernize rather than replace their core systems, ensuring continued stability while integrating new technologies.

Learn how seamless fintech partnerships, open banking, and digital innovation are transforming banking.

How Are Banks Modernizing Core Banking Systems? 

To modernize core banking systems, many banks are strategically blending legacy infrastructure with modern technologies. By adopting a hybrid approach, financial institutions are balancing stability with innovation—refactoring or restructuring their existing systems while integrating cloud-based frameworks that provide greater agility.

Many banks are prioritizing core modernization by adopting cloud-native architectures, containerization, and APIs. This shift supports real-time data processing, enhances scalability, and improves integration with fintech ecosystems. Legacy system dependencies are being addressed through modular upgrades, allowing institutions to incrementally modernize their technology stack while maintaining operational continuity.

While every financial institution is different and there are many different applications, systems, architectures, and approaches used to effectively manage a financial institution’s core banking operations, there are generally three types of core banking systems today: monolithic core banking systems, modular core banking platforms, and cloud-native core banking solutions.

With core banking systems dating back to the 1980s and 1990s—and some legacy code dating back even further—banks have traditionally relied on rigid, monolithic structures. To break free from these constraints, financial institutions are now implementing cloud-native solutions, microservices, and DevOps methodologies. These modern approaches enable faster development cycles, seamless integrations, and improved regulatory compliance.

While every financial institution is different, most core banking systems today fall into three main categories:

1. Monolithic Core Banking Systems: Traditional backend systems that process transactions, maintain accounts, and handle essential banking operations. While efficient, they are rigid and difficult to update.
2. Modular Core Banking Platforms: More adaptable systems with independent modules that manage different banking functions, allowing for incremental updates without affecting the entire system.
3. Cloud-Native Core Banking Solutions: Modern, API-driven platforms built on microservices architectures, enabling financial institutions to rapidly deploy new services and scale their operations efficiently.

Before examining these systems in detail, it’s important to understand how decades of banking technology evolution have shaped today’s complex core banking environment.

The Evolution of Core Banking Systems and COBOL

Many of the first core banking systems were developed using COBOL, a programming language created in 1959 by Grace Hopper and a team of industry experts. COBOL became widely adopted in banking due to its strong batch processing capabilities, transaction efficiency, and precision in financial calculations.

Surprisingly, COBOL remains a critical part of banking infrastructure. Despite efforts to transition to modern programming languages, COBOL-based core banking systems still power a significant portion of financial transactions worldwide. However, the industry is facing a growing shortage of COBOL developers, making system maintenance increasingly difficult.

In 2017, Reuters estimated that there were over 200 billion lines of COBOL code still in use. A 2022 study suggested that the real figure could be closer to 800 billion lines, highlighting the persistent reliance on legacy technology. According to industry estimates:

• Over 40% of banking systems still run on COBOL.
• More than 80% of in-person banking transactions rely on COBOL-based systems.
• Approximately 95% of ATM transactions involve COBOL in some capacity.

A portable programming language that was both hardware independent and, for its time, easy to read, COBOL was quickly adopted for its performance capabilities, standardization efforts, and its compatibility with mainframes—large computers with powerful processing capabilities often used by banks or government organizations for mission-critical applications. Throughout the 1960s and 1970s, COBOL was widely used in the development of key government and financial systems around the world, and it has ultimately become the backbone of not only the computer software industry, but also the global economy.

COBOL is everywhere. Even today, it’s considered the code that controls money.

Surprisingly, many banking leaders view the language as strategic and critical to their businesses today, even though COBOL developers are getting harder and harder to find and more flexible systems, architectures, languages, and technologies are available.

In 2017, a report by Reuters estimated that there were over 200 billion lines of COBOL still in use. According to that same report, 43 percent of banking systems are built on COBOL, 80 percent of in-person transactions use COBOL, and 95 percent of ATM swipes rely on COBOL.

More recent research suggests that study may have underestimated the real figures and prevalence of COBOL, suggesting that approximately 800 billion lines of COBOL are still in use today.

Many core banking systems were originally programmed in COBOL because of its large-scale batch processing capabilities, transaction processing capabilities, and mathematical precision—everything a core banking system needs. It was also extremely fast. Paired with mainframe computers, COBOL was—and somehow remains—incredibly powerful.

Unfortunately, it’s also obsolete. Most university or college curriculums don’t offer it. That alone makes it hard to find developers, making its programs hard to change or update.

While COBOL’s efficiency and reliability have kept it relevant, it presents significant modernization challenges. Most universities no longer teach COBOL, making it difficult to find skilled developers. As a result, banks are leveraging middleware solutions, API integrations, and cloud computing to extend the life of these systems while introducing modern functionality.

Types of Core Banking Systems: Monolithic, Modular, and Cloud-Native

There are three main types of core banking systems in use today:

1. Monolithic Core Banking Systems

The original core banking solutions, these systems manage transactions, account updates, payments, and general ledger functions. While reliable and secure, they are inflexible, requiring major system-wide updates for any modification.

2. Modular Core Banking Platforms

A more adaptable approach, modular platforms separate banking functions into independent components. Banks can implement, update, or replace individual modules—such as loans, mortgages, or compliance tools—without affecting the entire system. This improves agility and reduces operational risk.

3. Cloud-Native Core Banking Solutions

The most modern iteration, cloud-native core banking platforms leverage microservices, APIs, and containerization to create a scalable and flexible banking environment. These platforms allow banks to introduce new products faster, enhance security, and improve system resilience. Cloud-native architectures also enable continuous integration and deployment (CI/CD), supporting agile software development practices.

The Shift from Monolithic Systems to Microservices  

When we think about financial technology and the future of banking, we tend to consider the things that symbolize progress. It’s easy to look to the recent rise of neo banks and other popular fintechs or even turn to Banking-as-a-Service and embedded finance to gain new perspectives on how emerging models and technological innovations are disrupting traditional finance by leveraging modern systems to create entirely new personal banking experiences.

As financial institutions continue modernizing, the industry is shifting from monolithic core systems to microservices-based architectures. Microservices allow banks to develop and deploy services independently, improving scalability and reducing operational risks. By breaking down monolithic structures, financial institutions can achieve greater flexibility and seamlessly integrate new fintech solutions.

While completely replacing core banking systems remains a complex challenge, many banks are embracing a phased approach—modernizing their most critical services first while gradually transitioning toward cloud-based infrastructures.

Looking for a Core Banking Solution?

Portfolio+ provides modern, cloud-based core banking solutions used by leading financial institutions across Canada. We understand the challenges of legacy modernization and offer solutions designed to integrate seamlessly with existing infrastructure.

If you’re exploring core banking modernization, open banking strategies, or cloud migrations, contact us today to learn how a Portfolio+ cloud-native core banking solution can drive innovation for your financial institution.

 

Sources: 

https://en.wikipedia.org/wiki/Core_banking (Retrieved June 8, 2023)

https://en.wikipedia.org/wiki/FLOW-MATIC (Retrieved June 8, 2023)

https://www.ibm.com/downloads/cas/WZVPAYWL (Retrieved June 12, 2023)

https://fingfx.thomsonreuters.com/gfx/rngs/USA-BANKS-COBOL/010040KH18J/ (Retrieved June 14, 2023)

https://www.wealthsimple.com/en-ca/magazine/cobol-controls-your-money (Retrieved June 14, 2023)

https://www.microfocus.com/en-us/press-room/press-releases/2022/cobol-market-shown-to-be-three-times-larger-than-previously-estimated-in-new-independent-survey (Retrieved June 14, 2023)

https://www.howtogeek.com/667596/what-is-cobol-and-why-do-so-many-institutions-rely-on-it/ (Retrieved June 14, 2023)

https://en.wikipedia.org/wiki/COBOL (Retrieved June 13, 2023)

https://americanhistory.si.edu/cobol/proposing-cobol (Retrieved June 14, 2023)

https://www.ibm.com/downloads/cas/WZVPAYWL (Retrieved June 12, 2023)

Reuters: COBOL’s Role in Banking (Updated)

Micro Focus: COBOL Market Study 2022 

IBM Research on Banking Infrastructure

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TORONTO, March 11, 2025 /CNW/ – Portfolio+, a leader in Canadian banking technology, today announced that Habib Canadian Bank has selected the company’s automated term deposit solution to launch nominee-name guaranteed investment certificates (GICs) through a network of deposit brokers, reaching Canadians nationwide. The technology will streamline deposit sales and processing, help meet the growing demand for GICs in Canada, and unlock access to capital to support the expansion of the bank’s lending business.

Leveraging seamless integration with the industry’s leading GIC exchange network, Portfolio+ offers Habib Canadian Bank robust broker management features and a wide range of deposit options to meet the diverse needs of Canadians. By automating and streamlining GIC sales, the solution minimizes manual administration and ensures financial institutions have complete control over pricing, terms, and funding levels.

“Portfolio+ will provide the technology and integration capabilities we need to quickly grow our GIC and term deposit business across Canada,” said Hasan Naqvi, Chief Financial Officer at Habib Canadian Bank. “This partnership will allow us to expand beyond our current market, ensuring we can offer greater access to the services and financial solutions Canadians deserve.”

“Our partnership with Habib Canadian Bank highlights the power of leveraging our deposit solutions to scale quickly and efficiently,” said Dianne Cupples, CEO of Portfolio+. “We are proud to support their expansion across Canada, bringing more savings, investment, and borrowing opportunities to Canadians.”

With Portfolio+ term deposit technology, financial institutions can:

• Automate GICs and Term Deposit Sales:

  Streamlines term deposit processing and administration by automating the sales process for nominee-name GICs.

• Expand Market Reach: 

  Enables financial institutions to quickly expand market reach, providing the ability to scale deposit sales with flexible rate controls.

• Strengthen Broker Relationships:

  Enhances broker management with flexible rate, incentivization, and commission options.

Portfolio+ is trusted by some of the biggest and best banks in Canada. Leveraging core banking technology, cloud deployment services, and powerful integration capabilities, Portfolio+ helps financial institutions deliver financial products and services designed with Canadians in mind.

About Habib Canadian Bank

Habib Canadian Bank was established in 2001 and is a subsidiary of Habib Bank AG Zurich—established in Switzerland in 1967 and has grown into a global institution with a presence in 11 countries spanning across four continents. Over the past six decades, HBZ has expanded internationally, combining modern technology with timeless values.

Built on the foundation of trust, integrity, and innovation, Habib Canadian Bank offers a comprehensive spectrum of products and services designed to cater to customers diverse banking needs.

Located in Brampton, Mississauga and Scarborough.

About Portfolio+ Inc.

Portfolio+ banking systems and technologies connect financial institutions with fintechs and industry partners, providing a trusted platform for Canadian banking. Its powerful cloud-based core banking system and RESTful API are used by the country’s best banks, offering a flexible foundation for some of the industry’s most innovative banking and Banking-as-a-Service solutions. Designed in Canada, Portfolio+ solutions are thoughtfully developed to support the evolving ecosystem of financial services technology, and the company remains focused on enabling the financial marketplace with solutions that impact Canadians every day.

Portfolio+ is used by 5 of the 6* largest financial institutions in Canada, as well as Forbes’ best banks.

Located in the Greater Toronto Area (GTA), Portfolio+ Inc. is a part of Vencora.

For more information, contact us.

Read the original PR.

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Portfolio+ Inc. (Portfolio+), a leading Canadian provider of financial services systems and technologies, is pleased to announce the next major release of Portfolio+ will be available on March 17, 2025. Crafted with both API-based banking and cloud technologies in mind, Portfolio+ 19.0 is packed with over 200 targeted improvements, including over 30 new updates and enhancements specifically designed to drive efficiencies and streamline operations, enhance data accuracy and risk mitigation, and improve reporting for clearer insights and more informed decision-making.

With targeted enhancements throughout Portfolio+’s core banking subsystems, the Portfolio+ banking platform continues to evolve and adapt with the changing financial services industry, bringing next-generation technologies, market-driven financial products, and trusted regulatory solutions to Canada’s best banks and financial institutions.

Log in to Advantage and visit the notifications page to download the release notes for Portfolio+ 19.0 today!

Call Now!

What’s New in the Major Release?

System administration configuration enhancements provide improved data consistency and greater control over managing mortgage insurance premium (MIP) tax rates, creditor insurance, and regulatory categories. With greater control, financial institutions can streamline more day-to-day operations, reduce non-compliance risks, and focus on growth.

Accounting & agent management subsystem automations and streamlined processes improve month-end closing, agent commission tracking, and term deposit searches. This accelerates reporting, provides better tracking and clearer financial insights, and improves portfolio management.

Client management & integrated processing updates simplify client searches, credit bureau uploads, and pre-authorized credit (PAC) administration. Easier credit bureau uploads and PAC administration help ensure regulatory compliance, while streamlined client searches improve operational efficiency and customer experience.

Lending subsystem features improve underwriting and data accuracy by offering a blended rate calculator for refinancing, a hypothetical underwriter for better cross-selling opportunities, and additional loan renewal options and partial loan payments. These updates boost cross-selling potential, offer more flexible loan options, and make it easier for Canadians to access the funds they need.

Investment & syndication subsystem updates include enhanced reporting with an investment cash account transaction details report and partner cash account reconciliation to track partner loan payments in cash accounts. These reports empower financial institutions to maintain accurate financial records, optimize cash flow management, and strengthen partnerships through reliable and efficient account tracking.

Term deposit and guaranteed investment certificate (GIC) subsystem improvements include one-click access to GIC transfer and registration histories, along with an enhanced user experience for GIC partial redemptions. These updates simplify portfolio management and provide more efficient access to critical account information, ultimately helping clients optimize their investment strategies for a better financial future.

The upcoming products, features, and enhancements are all designed to improve business processes and overall user experience. Portfolio+ encourages customers to use the latest release notes as a guide to prepare for regression and user acceptance testing.

Customer feedback is invaluable as we focus on enabling the financial marketplace with solutions that impact Canadians every day.

For more information on Portfolio+, including its API capabilities, cloud-based banking solutions, or its core banking system, contact us today!

Call Now!

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Banking technology is complex. Many of the largest banks and financial institutions in North America operate on a unique collection of financial applications, legacy systems, powerful programming languages, and modern digital platforms—all carefully integrated over decades of investment in core infrastructure. Apart from retail banking software and term deposit software, it’s arguably one of the most critical elements of a core banking system: investment management software.

Investment management software is a core banking technology subsystem designed to help banks, financial institutions, investment firms, and credit unions manage and oversee investment portfolios. This software streamlines various investment-related processes, from investment planning and trading to analysis and reporting, providing a comprehensive solution for managing financial assets from stocks, ETFs, bonds, and mutual funds to tax-sheltered investment plans.

Users can use the platform to open accounts, administer plans, buy and sell securities and financial assets, track performance, manage risk, and handle compliance. The software is particularly useful in automating routine tasks, providing real-time insights and access to financial markets, and helping organizations meet regulatory standards—all critical in an industry where access, performance, and data accuracy are essential.

In this blog post, we’ll summarize why banks need investment management software, explore how these systems work, and discuss the different types of investment accounts they support. We’ll also highlight the essential features of investment management software and explain the differences between non-registered and registered investment accounts. Finally, we’ll look ahead to the future, touching on the importance of application programming interfaces (APIs) and exploring how emerging technologies like artificial intelligence may shape the next generation of investment management solutions.

Why Do Banks Need Investment Management Software?

People turn to banks and financial institutions for many reasons, but at the heart of it all is one simple idea: A financial institution is the safest place to put your money. Whether clients are building up their savings, buying a home, or planning their financial goals, banks and credit unions are often the first stop. Beyond being safe, these trusted institutions provide opportunities with access to financial assets, investment options, and expert advice—all of which can help grow a client’s wealth. However, with thousands of clients and countless portfolios to manage, financial institutions must rely on technology to efficiently oversee these investments at scale.

This is why banks need investment management software. By centralizing critical investment management tasks, an investment management system offers a streamlined platform for banks and financial institutions to manage portfolios with precision and efficiency. From onboarding new clients, setting up portfolios to tracking transactions, reconciling accounts, and monitoring investment performance, this software helps institutions ensure that investments align with their clients’ short- and long-term financial goals.

With automated compliance reporting, risk analysis, and trading, investment management software also helps institutions reduce errors, eliminate redundancies, and make smarter, faster decisions. With these simple automations, financial professionals can focus on higher-value work and the things that really matter—like providing unique advice, building strategic investment plans, and nurturing customer relationships through personalized financial services.

Ultimately, investment management software doesn’t just keep financial institutions organized—it empowers them to deliver more effective, efficient, and personalized services, making it a key component of modern core banking infrastructure.

How Does Investment Management Software Work?

Investment management software generally acts as a central hub for managing all the tasks involved in overseeing client investment portfolios, bringing together data, automating workflows, and offering tools that allow banks and financial institutions to manage investments smoothly and accurately. But not all software is created equally.

Depending on the system, investment management software can be a specialized subsystem within a core banking application, a fully standalone application, or a point solution with limited investment book of record (IBOR) functionality that integrates with pre-existing systems and external third-party applications through an application programming interface (API). Apart from modern APIs, these systems may also use other technologies for integration, like file-based transfers where data is exchanged through batch file uploads and downloads using Secure File Transfer Protocol (SFTP). Despite their differences, these systems ultimately perform many of the same tasks, consolidating data, automating operations, and providing real-time insights that enable banks to efficiently manage portfolios and investments for a wide range of client needs. They help streamline complex investment operations, while meeting both client needs and regulatory requirements.

So, how exactly does investment management software work? The software walks banks and financial institutions through a process that makes it easy to onboard clients, set up investment portfolios, execute trades and orders (stocks, ETFs, mutual funds, bonds, etc.), monitor portfolio performance, and rebalance portfolios based on asset allocation.

Let’s explore the workflow process in a little more detail.

Here’s how investment management software typically works:

1. Client Onboarding: The process starts with bringing a new client onboard. Investment management software allows banks to create new customer profiles, providing an integrated workflow that ensures the proper information is collected. This ensures legal and compliance checks like know your customer (KYC) and anti-money laundering (AML) are completed. Information about the client’s financial goals, risk tolerance, and investment preferences is captured at this stage.
2. Data Integration and Portfolio Setup: Once the client is onboarded, the software integrates data from multiple sources. Client profiles, account details, and pre-existing data provide a comprehensive view of the client’s investment needs and financial goals. From here, financial advisors can begin to set up client investment accounts, plans, and products. They can build personalized portfolios, aligning asset allocations with the client’s needs, ensuring that investments reflect their financial objectives and risk tolerance.
3. Trading and Management: As financial advisors work with their clients to make investment decisions, the software automates the execution of trades, ensuring that they are completed accurately and efficiently. Trades are processed with minimal manual intervention, reducing the chances of errors and delays.
4. Portfolio Monitoring and Rebalancing: The software continuously monitors portfolio performance in real-time, tracking changes in the market and comparing them to the client’s investment strategy. If performance deviates from predefined targets, the system triggers rebalancing recommendations or sometimes automatic adjustments to keep the portfolio aligned with the client’s goals. Automated rebalancing can help protect clients from excessive risk, especially during market fluctuations.
5. Compliance and Risk Management: Throughout the lifecycle of client portfolios, investment management software helps ensure financial institutions remain in compliance with relevant regulations established by regulators, such as the Office of the Superintendent of Financial Institutions (OSFI) and provincial securities commissions. The software automates critical compliance reporting tasks, minimizing manual errors, maintaining a comprehensive audit trail for compliance verification, and adhering to regulatory mandates.
6. Reporting and Insights: In addition to regulatory reports, over time the software provides both clients and financial institutions with transparent, real-time or periodic reports. These reports give insights into portfolio and investment performance, market trends, and compare client portfolio growth with market indices, helping financial advisors offer informed guidance to ensure their clients stay updated on their investments.
7. Advisory Services: The software’s reporting capabilities can also provide data-driven insights help provide personalized advice. Whether it’s suggesting adjustments based on market conditions or financial goals, the investment system supports advisory services by giving banks the tools and information they need to deliver better services.

In summary, investment management software works by automating and streamlining key tasks in a logical, step-by-step process—from onboarding clients and setting up portfolios to monitoring, rebalancing, and ensuring compliance. This workflow helps financial institutions operate more efficiently and make more informed decisions, ultimately improving the client experience by optimizing portfolio performance and creating tailored investment portfolios.

Different Types of Investment Accounts: Non-Registered vs. Registered

We’ve explored how investment management systems work, but understanding the types of accounts these systems support is just as important. Investment management software is designed to manage both registered and non-registered accounts, each of which includes various types of investment accounts suited to different financial needs. Let’s break down these categories and highlight some of the key account types that can be managed on these systems.

What Are Registered Accounts?

Registered accounts are investment accounts that are registered with the Canadian government and offer specific tax advantages and incentives. Also called tax-sheltered accounts, these accounts are popular for long-term investing, especially for retirement, as they provide tax-deferred or tax-free growth.

Here are the main types of registered investment accounts in Canada:

• RRSP (Registered Retirement Savings Plan): One of the most common registered accounts, an RRSP allows individuals to save for retirement with tax-deferred growth. Contributions are tax-deductible, and taxes are paid only when funds are withdrawn, typically in retirement when the individual’s tax rate is lower.
• TFSA (Tax-Free Savings Account): A TFSA allows individuals to save or invest money and withdraw it tax-free. Unlike an RRSP, contributions to a TFSA are not tax-deductible, but earnings within the account grow tax-free, and withdrawals are also tax-free.
• RESP (Registered Education Savings Plan): An RESP is designed to help save for a child’s post-secondary education. Contributions are not tax-deductible, but investment income grows tax-deferred, and the government may contribute additional grants, like the Canada Education Savings Grant (CESG).
• RDSP (Registered Disability Savings Plan): An RDSP is designed to help parents and individuals save for the long-term financial security of someone eligible for the Disability Tax Credit (DTC). Contributions are not tax-deductible, but the plan offers tax-deferred growth, and the government may contribute through matching grants or bonds, making it an attractive option for those with disabilities.
• FHSA (First Home Savings Account): The FHSA allows first-time homebuyers to save up to a specified limit, combining aspects of an RRSP and a TFSA. Contributions are tax-deductible, and withdrawals (including any investment growth) used to purchase a home are tax-free, making it a powerful tool for home ownership savings.
• RRIF (Registered Retirement Income Fund): An RRIF is a registered account that converts RRSP savings into income during retirement. Funds in an RRIF must be withdrawn annually, and the withdrawals are taxed as income.
• LIRA (Locked-In Retirement Account): A LIRA holds pension funds for individuals who have left a company’s pension plan. Unlike an RRSP, funds in a LIRA are “locked in” and generally cannot be withdrawn until retirement, except under certain circumstances. It can later be converted to a Life Income Fund (LIF) or a similar retirement income option.

What Are Non-Registered Accounts?

Non-registered accounts, on the other hand, do not offer the same tax benefits as registered accounts. These are flexible investment accounts that can hold a variety of assets but do not have the same restrictions or advantages when it comes to taxes.

Common types of non-registered investment accounts in Canada include:

• Individual Accounts: These are personal accounts held by an individual investor for saving or investing. There are no tax advantages, but they offer flexibility, and there are no withdrawal restrictions.
• Joint Accounts: A joint account is held by two or more individuals, such as a couple, who share equal ownership of the investments. Joint accounts are typically non-registered, though joint registered accounts like joint RRSPs also exist in some cases. Taxes are paid on investment income, and all holders are responsible for reporting their share.
• Corporate Accounts: These accounts are used by businesses to invest surplus funds. Corporate investment accounts allow businesses to grow their assets, but the income earned is subject to corporate tax rates, which may differ from personal tax rates.
• Taxable Investment Accounts: Taxable investment accounts are similar to individual accounts but are specifically used for investments that are subject to taxation. These accounts may include equities, bonds, mutual funds, and other taxable investment products.

Ultimately, registered and non-registered accounts each offer unique advantages tailored to specific financial goals. While registered accounts often provide tax incentives and are designed for long-term savings, such as retirement or education, non-registered accounts can sometimes offer greater flexibility without tax-deferred or tax-free growth. By supporting both types of accounts, investment management software helps financial institutions meet diverse client needs.

4 Key Benefits of Investment Management Software for Banks and Credit Unions

Investment management software offers a wealth of advantages that make it indispensable for banks, credit unions, and other financial institutions. By providing a unified platform to manage client investment portfolios—sometimes through a combination of integrated solutions that handle different aspects of the investment management lifecycle—these systems streamline operations, enhance client service, and drive efficiency across the board.

1. Streamlined Operations and Efficiency: By centralizing and automating key investment tasks, investment management software enables institutions to optimize their workflows and reduce operational overhead. From client onboarding to portfolio rebalancing, the software minimizes manual intervention, reduces errors, and allows financial professionals to focus on higher-value work. This operational efficiency translates into significant cost savings, faster transaction times, and improved scalability.
2. Enhanced Client Experience: Investment management software empowers financial institutions to deliver personalized, client-centric services. With tools that provide detailed insights into individual client needs and market conditions, advisors can create tailored portfolios, offer data-driven recommendations, and ensure each client’s investments are optimized to their goals. The result is a more engaging and rewarding client experience, building trust and long-term relationships.
3. Improved Risk Management and Compliance: The regulatory environment in the financial sector is complex and constantly changing. Investment management software helps institutions stay ahead by automating compliance processes, maintaining comprehensive audit trails, and performing real-time risk analyses. Automated alerts and compliance checks enable institutions to respond quickly to changing regulations and ensure adherence to Canadian standards, such as those set by the Office of the Superintendent of Financial Institutions (OSFI) and other provincial regulatory bodies.
4. Real-Time Insights and Analytics: Access to real-time market data, portfolio performance metrics, and comprehensive analytics is crucial for making informed investment decisions. Investment management software aggregates and analyzes data, providing actionable insights that enable financial professionals to respond dynamically to market fluctuations, rebalance portfolios as needed, and align investments with changing market trends.

The Role of APIs and Cloud Infrastructure in Investment Management Solutions

As the financial industry evolves, so too does the technology that supports investment management. To meet the growing demands of Canadians and financial institutions, investment management software is increasingly leveraging cloud infrastructure and Application Programming Interfaces (APIs) to offer more flexible, scalable, and integrated solutions. These innovations are enabling even smaller institutions to access powerful investment management capabilities without the need for extensive IT resources through the deployment of point solutions.

Cloud-Based Solutions Offer Scalability and Flexibility

Cloud-based deployment or cloud banking is revolutionizing the way investment management software is used across the financial sector, particularly as a core banking application. By moving to the cloud, financial institutions gain access to highly secure and scalable solutions that can grow with their needs. The cloud provides a more cost-effective way to manage investment portfolios, reduces IT infrastructure costs, and enhances data storage and security. This flexibility allows institutions to respond to market changes quickly, deploy new features seamlessly, and ensure their systems remain up to date with the latest advancements in financial technology.

API-Driven Integration Can Streamline Customization

APIs are making investment management systems more customizable and create interoperability with other financial technologies. Through API-driven integration, financial institutions can create or connect point solutions tailored to their specific needs, without having to replace their entire IT infrastructure. For smaller institutions, like Canadian credit unions, this means they can easily implement an investment management system that integrates with their existing platforms, making it possible to leverage advanced tools and features without significant upfront investment. APIs provide a way to connect different financial systems, enabling seamless data exchange and improving operational efficiency across multiple platforms.

Looking Ahead: The Future of Investment Management Software

As technology continues to evolve, so will investment management systems. There’s no doubt that artificial intelligence (AI) will play a powerful role in personal investing in the years ahead as trusted investment management software expands to provide more powerful personalized investing experiences.

In the coming years, AI may play a crucial role in automating portfolio management, improving risk analysis, and driving smarter investment decisions. While AI applications in investment management are still developing, they hold the potential to significantly enhance how financial institutions manage assets and respond to market conditions, offering an exciting glimpse into the future of investment management solutions.

For more information on Portfolio+, including its API and investment management capabilities, cloud-based banking solutions, or its core banking system, contact us today!

Sources:

https://www.investopedia.com/terms/k/knowyourclient.asp  (Retrieved November 7, 2024)

https://www.investopedia.com/terms/i/investment-management.asp (Retrieved November 5, 2024)

https://www.canada.ca/en/revenue-agency/services/tax/registered-plans-administrators/registered-investments/registered-investments-1.html (Retrieved November 6, 2024)

https://www.investopedia.com/terms/u/unregistered-account-/-nonregistered-account.asp (Retrieved November 7)

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The right loan origination software can make a world of difference when it comes to lending—and a loan origination system can arguably provide one of the most impactful ways to completely transform an organization’s lending process. That’s why Canadian banks, credit unions, and financial institutions are always seeking new technologies in order to improve their lending processes and operations. If there’s a way to streamline the loan approval process or make the homebuyer’s journey a little smoother, forward-thinking financial institutions want to know about it.

One of the biggest problems banks and financial institutions face is rooted in lending processes. Traditional lending processes involve high level of tedious and sometimes complex manual tasks, including document collection, application review and verification, and a slew of other data entry challenges. These manual processes are notorious for leading to long turnaround times and bottlenecks in loan approvals. They slow down the overall lending cycle, frustrate customers, and directly impact operational efficiency. Whether it means acquiring more powerful decision-making capabilities, automating borrower risk assessments, or discovering new integrations to enhance the customer experience, banks and financial institutions are constantly exploring solutions to these challenges.

To address these challenges, many institutions make strategic, targeted investments in lending software—a broad category of technology solutions that automate and optimize the entire loan lifecycle. This includes systems designed for specific stages of lending, such as loan origination systems (LOS) and loan management systems (LMS).

We’ve covered loan management software in a previous post, but we haven’t yet explored loan origination software, the nuances between lending systems, or the opportunities this technology offers to create a more modern and intuitive lending experience.

So, what is a loan origination system? How does it fit into a financial institution’s core banking infrastructure? What are some of its key features? And what are some of the problems it can help banks and financial institutions address in their lending processes and operations?

In this blog post, we will explore the loan origination system, highlighting its unique role in the lending process. We’ll cover the key feature of an LOS and examine how it benefits banks, financial institutions, and credit unions looking to streamline their lending business. We’ll also discuss how an LOS often works alongside an LMS, to provide banks and financial institutions with a comprehensive, efficient approach to loan origination and servicing from start to finish.

What Is a Loan Origination System?

A loan origination system (LOS) is a digital platform that automates and manages the initial stages of the loan process, from application intake and document collection to credit assessment, underwriting, and loan approval. By streamlining origination and loan processing, an LOS enhances decision-making and improves borrower experiences, enabling faster loan and mortgage approvals, while ensuring regulatory compliance.

By automating key steps, an LOS reduces manual workloads, minimizes errors, and accelerates decision-making, ensuring a smoother pre-approval process. This not only benefits lenders by improving operational efficiency, but it also creates a better experience for borrowers, who can receive faster loan decisions with fewer delays. In fact, modern loan origination systems can even bring approval time to within a few minutes, and loan funding to within 24 hours.

An effective LOS is equipped with various features and functionalities that cater to the complexities of the lending process. These digital lending capabilities not only simplify the workflow for financial institutions but also enhance the overall experience for borrowers.

Let’s look at some key features of a loan origination system.

Key Features and Functionalities of a Loan Origination System (LOS):

• Application Intake: Digital forms that enable borrowers to easily submit their loan applications online, providing a user-friendly interface to gather necessary information.
• Application Processing: Automatic validation of submitted information to reduce errors, ensuring that applications are complete and ready for review.
• Document Management: Secure collection, storage, and retrieval of necessary documentation (e.g., income verification, credit history), along with e-signature capabilities for remote signing.
• Credit Assessment and Scoring: Integration with credit bureaus for instant credit reports and automated scoring algorithms for real-time credit assessments.
• Underwriting Automation: Automated underwriting processes that evaluate borrower risk using predefined rules and algorithms to help streamline decision-making.
• Regulatory Compliance: Built-in compliance checks and anti-fraud controls to adhere to relevant regulations and audit trails for accountability.
• Integration Capabilities: APIs that allow seamless integration with other financial systems and compatibility with third-party platforms.
• Reporting and Analytics: Dashboards providing insights into loan performance metrics and customizable reporting tools for operational analysis.
• Customer Relationship Management (CRM) Features: Tools for tracking borrower interactions and automated communication features to enhance the customer experience.

These features work together to create a streamlined and efficient loan origination process, significantly reducing manual workloads and errors. Collectively, they improve decision-making, accelerate loan approvals, and provide a better experience for borrowers.

Ultimately, an LOS enables banks, credit unions, and other financial institutions to modernize their operations and enhance the overall efficiency of their lending services.

How Does Loan Origination Software Streamline Lending?

So, how exactly does an LOS enhance the efficiency of a bank’s lending services? Well, an LOS streamlines the lending process by automating traditionally manual and time-consuming tasks, such as application intake, document collection, and credit assessment. By digitizing and automating these tasks, the system eliminates a lot of the inefficiencies rooted in manual data entry. That reduces the risk of human error and speeds up loan approval times.

Integrated workflows within an LOS also ensure that loan and mortgage applications are processed faster, allowing financial institutions to handle larger volumes of loans and mortgages without sacrificing accuracy or compliance requirements.

This approach helps address some critical challenges that lenders face, like delayed approvals due to incomplete documentation, inconsistent underwriting decisions, and bottlenecks caused by manual reviews. For example, by automatically validating applicant information and integrating credit reports, an LOS allows underwriters to focus on risk assessment rather than paperwork.

An LOS doesn’t completely eliminate manual intervention from the lending process. Not for everyone, anyway. But it comes close. It can provide significant automation and efficiency gains, while eliminating redundant tasks, ensuring that underwriters can spend more time focusing on what really matters—making sound lending decisions.

What’s the Difference between a Loan Origination System and a Loan Management System?

While both an LOS and LMS are both key components of a financial institution’s banking technology, these lending software solutions can often serve distinct functions. It’s important to remember that every financial institution is different. Their systems are different. Their processes are different. And their technology is different. With countless iterations of underlying technology solutions often spanning decades, it’s not uncommon for financial institutions to have a collection of modern platforms, modular core banking solutions, and other legacy technology integrated with a pre-existing core banking system.

With this in mind, it’s important to note the nuances. Some mortgage software and loan management lending solutions offer workflows that cover the entire lending lifecycle from origination to funding to servicing. But, as we mentioned, there are often key differences between loan origination systems and loan management systems. So, what’s the difference between and LOS and an LMS?

Generally, an LOS focuses on the pre-approval stages of the lending process, assisting with loan application processing and document management and credit assessment. An LMS takes over after the approval stage, managing the loan or mortgage through repayment and servicing until it reaches maturity.

Together, these two systems cover the full lending lifecycle, providing financial institutions with powerful tools to efficiently manage loans and mortgages from start to finish.

How Do Loan Origination Systems Work with Loan Management Systems?

Although a loan origination system and a loan management system can serve distinct roles in the lending process, they often work together to ensure seamless end-to-end loan management. The transition between an LOS and LMS is critical for maintaining data integrity, speeding up operations, and providing a seamless experience for both lenders and borrowers.

A modern LOS generally handles the pre-approval and origination stages—such as application intake, document verification, and underwriting—up until the loan is approved. Once a loan is approved, the LMS takes over, managing the loan’s lifecycle through repayment and servicing. This includes tasks like tracking payment schedules, calculating interest, processing payments, generating statements, and ensuring compliance throughout the loan’s duration.

The Role of Application Programming Interfaces (APIs) in LOS and LMS Integration

The smooth collaboration between LOS and LMS is often achieved through integration using Application Programming Interfaces (APIs). APIs facilitate the secure and real-time transfer of data between the two systems. Like a messenger, an API ensures that critical information like borrower details, loan terms, and underwriting decisions are automatically and securely transferred from the LOS to the LMS without manual intervention, allowing financial institutions to maintain efficiency and accuracy across their operations.

Using APIs, the integrate systems can also connect with other financial tools, as well as other systems used in a bank’s infrastructure, including customer relationship management (CRM) platforms, compliance monitoring systems, and credit-scoring models. This creates a streamlined environment where data flows freely and securely between multiple platforms, creating a comprehensive, integrated ecosystem that enhances productivity and improves the lending experience.

5 Benefits of Implementing Loan Origination Software for Lenders

It should be obvious by now: A loan origination system is a powerful way to transform a financial institution’s lending operations. The right system will not only streamline lending leading to faster and more efficient loan approvals, but it will also help banks and credit unions prepare for a future of personalized banking that meets the expectations of digital native consumers, while supporting business partnerships, integration, and interoperability.

In fact, an LOS has the potential to make the single biggest impact to user experience—not just the borrowers experience, either, since lending software paired with APIs can even help financial institutions transform the lending experience for their own internal underwriters and loan management professionals.

Ultimately, loan origination systems offer a wide range of benefits, helping financial institutions overcome traditional challenges in the lending process. If we were forced to narrow it down, these are the five key advantages of adopting an LOS for banks, credit unions, and other lending institutions:

1. Improved Efficiency and Faster Loan & Mortgage Processing
   By automating manual tasks such as application intake, document collection, and credit assessment, an LOS dramatically reduces turnaround times. This efficiency enables financial institutions to process a higher volume of loan applications without sacrificing accuracy.
2. Enhanced Accuracy and Reduced Human Error
   An LOS automates data entry, document verification, and compliance checks, minimizing the likelihood of errors. Automated workflows ensure that tasks are completed consistently and accurately, reducing the risk of compliance issues or mistakes that could slow down the approval process.
3. Increased Loan Approval Speed and Customer Satisfaction
   Faster loan and mortgage approvals lead to a better experience for borrowers, making the overall lending process smoother. An LOS can integrate real-time credit scoring, instant document validation, and automated decision-making to further accelerate loan approval timelines, ensuring customers are not left waiting.
4. Strengthened Compliance and Risk Management
   Built-in or configurable compliance features allow financial institutions to stay aligned with ever-changing regulatory requirements. By automating audit trails, risk assessments, and reporting, an LOS helps mitigate risks associated with manual compliance processes, making it easier to meet legal standards.
5. Integration with Other Core Banking Systems
   LOS platforms integrate seamlessly with loan management systems (LMS) and other banking tools, creating a unified ecosystem. Through APIs, an LOS can connect with third-party tools, CRM platforms, and credit-scoring models, ensuring that data flows smoothly between systems to enhance operational efficiency and decision-making.

Loan Origination Software Will Drive the Future of Lending

Over the past decade alone, banking has changed dramatically, driven by changes in technology that promote personalized, self-serve, data-driven digital banking experiences. With a focus on personalized banking—as well as core modernization and cloud adoption—many financial institutions may be realizing that their legacy lending platforms and processes have been neglected. With APIs and increased competition in the lending space, there’s never been a better time to explore opportunities offered by loan origination software and lending technology.

As we explored, implementing an effective loan origination system that automates key processes and significantly reduces manual workloads, minimizes errors, and accelerates the loan approval process will help ensure seamlessness in an organization’s lending lifecycle.

As the industry continues to evolve, technology will continue to drive the future of lending. This makes it imperative for organizations to uncover lending solutions that address traditional challenges while providing the foundational technology that will position them for future growth and success. And with the increasing adoption of APIs in the banking industry, strategic investment in new systems can also help protect investments in trusted core and legacy systems, creating a comprehensive suite of technology that’s tailored for any financial institution’s unique needs.

For instance, our Equitable Bank case study explores how one Canadian bank used Portfolio+’s API to launch its own loan origination system, leveraging a pre-existing loan management system to create a modern user experience for its underwriters, while transforming its lending technology.

Ultimately, a loan origination system can help financial institutions meet the demands of modern borrowers and create a more intuitive lending experience for internal underwriters, while providing a more efficient, compliant, and user-friendly lending environment overall.

Lending is a complex process. By leveraging the capabilities of an LOS, financial institutions can mitigate some of those complexities and creating a better borrowing experience.

For more information on Portfolio+, including its API and loan origination capabilities, loan management software, lending software, cloud-based banking solutions, or its core banking system, contact us today!

Sources:

https://www.investopedia.com/terms/o/origination.asp (Retrieved October 16, 2024)

https://en.wikipedia.org/wiki/Loan_origination (Retrieved October 17, 2024)

https://www.mckinsey.com/capabilities/risk-and-resilience/our-insights/the-lending-revolution-how-digital-credit-is-changing-banks-from-the-inside (Retrieved October 18, 2024)

https://www.investopedia.com/terms/a/automated_underwriting.asp (Retrieved October 21, 2024)

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Loan management software (LMS) is a specialized system used by Canadian banks, credit unions, and lenders to manage the entire lifecycle of loans and mortgages. This critical tool automates and streamlines key lending processes, including loan origination, underwriting, approval, funding, and servicing. As a vital component of a core banking system, a LMS ensures efficient loan portfolio management while meeting complex regulatory requirements.

In this blog post, we explore the core functionalities of loan management software and highlight the critical role it plays within a comprehensive core banking system. We’ll detail the five core features that make these systems invaluable, from loan origination to servicing. We’ll also discuss the numerous benefits these systems offer, such as enhanced efficiency, improved accuracy, and an optimal customer experience for both staff and loan applicants.

Additionally, we’ll examine how this software supports Canadian banks and lenders, ensuring regulatory compliance and providing access to a powerful collection of unique lending products designed for the rapidly evolving market. Finally, we’ll offer guidance on choosing the right loan management software for your financial institution, ensuring you have the insights needed to make a well-informed decision.

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5 Core Features of Loan Management Software

Often integrated as part of a broader core banking system that includes retail banking, Guaranteed Investment Certificates (GICs) and term deposits, investment management, and client management, loan management software is an indispensable tool for Canadian banks and lenders. It encompasses a range of functionalities that streamline and enable financial institutions to efficiently manage the entire lending lifecycle.

There are five core features of a loan management system that provide the functionality banks and financial institutions need to effectively manage the entire lifecycle of a loan or mortgage product: origination, underwriting, approval, funding, and servicing.

While each loan management system may differ, a comprehensive solution will ensure that every step of the loan management lifecycle is optimized for efficiency and accuracy.

1. Loan and Mortgage Origination

The loan origination process is the first critical step in lending. Origination is where it begins, covering everything from collecting personal information from a loan applicant to performing an initial assessment. During this stage, a loan management system captures a wide array of data essential for evaluating the borrower’s creditworthiness and the loan’s viability. This includes personal identification details, such as name, address, and Social Insurance Number (SIN), as well as financial information like income, employment history, credit score, and existing debts.

In addition to these basic details, the system also gathers information related to the specific loan product, including the requested loan amount, loan type (e.g., mortgage, personal loan, auto loan), interest rate preferences, and collateral details, if applicable. The software may also collect documents such as tax returns, pay stubs, and bank statements to verify the applicant’s financial situation.

Traditionally, this stage can be time-consuming and susceptible to human errors. However, modern loan management software often automates many of these origination tasks. For example, it can automatically validate data, cross-reference information with external databases, and flag any discrepancies for review. This ensures a faster and more accurate transition from the original application to pre-approval, reducing the likelihood of errors and delays.

Moreover, the software embeds regulatory compliance requirements into the process, helping Canadian banks adhere to strict standards while minimizing risk. By automating the collection and validation of information, the system not only enhances operational efficiency but also ensures that all necessary data is accurately captured and stored, facilitating smoother downstream processes such as underwriting and approval.

2. The Underwriting Process

The underwriting process focuses on assessing a loan applicant’s creditworthiness and determining risk. Loan management software streamlines this by automating the evaluation of key factors, such as credit scores, personal income, and existing debts. The system integrates with industry credit bureaus, including Equifax and TransUnion, to quickly retrieve credit reports. This data is analyzed using predefined criteria and risk assessment models, ensuring a consistent, accurate, and efficient evaluation process.

Additionally, the software simplifies income and employment verification by automating the collection and validation of necessary documents, such as pay stubs and tax returns. It applies relevant regulatory and internal compliance requirements, maintaining a detailed audit trail and managing workflows. This results in a faster, more accurate underwriting process while ensuring adherence to regulatory standards.

3. The Approval Stage

Following underwriting, the approval stage is where final decisions are made regarding the loan or mortgage. Loan management software often automates the approval of routine applications that meet predefined criteria, significantly speeding up the process. For more complex cases that fall outside standard parameters, the software flags these for manual review by loan officers or underwriters. This ensures that each decision is carefully considered and aligns with the financial institution’s risk management policies. By streamlining the approval process, the software balances efficiency with thoroughness, ensuring both quick turnaround times and adherence to established guidelines.

4. Funding & Disbursement

Once a loan is approved, the focus shifts to funding. Loan management software automates the disbursement of funds, ensuring accurate and timely transfers to the borrower’s account. It handles all aspects of disbursement, from calculating loan amounts to scheduling payments. Additionally, the software provides comprehensive tracking and reporting features, creating a transparent audit trail that supports compliance and aids in financial planning. This automation reduces errors, speeds up the disbursement process, and ensures that all transactions are well-documented for future reference.

5. Loan Servicing & Repayment

The final core feature of loan management software is servicing, which covers all post-disbursement activities. This includes processing payments, providing customer service, and managing borrower accounts throughout the life of the loan. The software ensures that payments are processed on time, interest is calculated accurately, and any customer inquiries are handled efficiently.

Loan management software also plays a crucial role in managing borrower accounts by tracking payment histories, updating balances, and recalculating payment schedules as needed. It can automatically adjust for changes, such as interest rate fluctuations or payment deferrals, ensuring that the loan remains on track. Additionally, the software generates detailed account statements and reports, providing borrowers with a clear understanding of their loan status at any given time.

Many systems offer customer-facing portals, allowing borrowers to manage their loans online. These portals enable borrowers to make payments, review account details, and access important documents, enhancing the overall experience and reducing the burden on customer service teams. By streamlining these activities, loan management software helps financial institutions maintain strong relationships with borrowers while ensuring efficient and compliant loan servicing.

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Key Benefits of Loan Management Software

Loan management software and systems offer a host of benefits that extend beyond simple task automation. For Canadian banks and lenders, these systems are essential tools for enhancing operational efficiency, improving accuracy, and ensuring regulatory compliance. By streamlining the entire loan lifecycle—from origination to servicing—these systems reduce manual errors, accelerate processing times, and enable staff to focus on higher-value tasks.

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Enhances Operational Efficiency

Loan management software automates many of the repetitive and time-consuming tasks involved in loan processing. This not only speeds up workflows but also significantly reduces the likelihood of human error. Tasks that once took days can now be completed in hours, freeing up valuable time for bank staff to focus on customer service and business growth.

Improves Accuracy and Consistency

With predefined criteria and automated checks, loan management software ensures that all loan applications are processed consistently and accurately. This reduces the risk of errors that could lead to compliance issues or financial losses. The software’s integration with credit bureaus and other data sources further enhances the accuracy of the information used in the decision-making process.

Embeds Regulatory Compliance Features

Operating in a heavily regulated environment, Canadian financial institutions must prioritize compliance. Loan management software is designed to embed regulatory requirements into every stage of the loan process, helping institutions adhere to local and national laws, thus reducing the risk of fines or penalties.

Provides a Better Customer Experience for Lenders and Borrowers

The automation and efficiency provided by loan management software translate into a superior experience for borrowers. Faster processing times, accurate information, and easy access to account details all contribute to higher customer satisfaction. Borrowers can manage their loans more easily, and banks can respond to inquiries more quickly and effectively.

Enables Scalability, Flexibility, and Growth

As financial institutions grow and their lending portfolios expand, loan management software can scale to meet increasing demands. These systems’ flexibility allows for adding new loan products, integrating with other banking systems, and adapting to changing regulatory requirements. Institutions can explore various powerful lending product types, including mortgages, auto loans, personal loans, small business loans, lines of credit, and commercial real estate loans.

How to Choose the Best Loan Management Software & Prepare for the Future of Lending

Although it might not feel like it, the financial landscape is rapidly evolving. Selecting the right loan management software is critical to ensuring your institution remains competitive and ready for the future of lending. As the industry shifts toward cloud-first infrastructures, digitization accelerates, and customer expectations continue to rise, your institution must be equipped with a system that not only meets current needs but also has the capabilities to adapt to future challenges.

In this section, we’ll briefly explore some key considerations when selecting loan management software.

A Cloud Banking Infrastructure Is Increasingly Important

The shift towards cloud-based and cloud-native core banking and lending systems is revolutionizing the operations of financial institutions. Cloud banking infrastructure offers enhanced security, scalability, and accessibility. When evaluating loan management software, prioritize those built on cloud-based platforms. These systems can easily scale to meet growing data demands, integrate with other cloud services, and provide seamless updates, ensuring your institution remains agile in a rapidly changing market.

Application Programming Interfaces (APIs) Provide Opportunities for Open Banking

As customers increasingly seek personalized and seamless financial services, open banking is becoming more critical. With an open banking framework legislation finally announced in Budget 2024, a functional open banking system in Canada still faces a slew of complex challenges. While some fintechs and industry experts remain skeptical about its progress, it’s no secret that open banking is coming to Canada.

Modern loan management systems should offer robust integration capabilities, enabling financial institutions to connect with a wide range of third-party providers, including fintechs and neobanks. These integrations, often facilitated through APIs, allow institutions to offer innovative services, such as real-time credit assessments, automated financial advice, and personalized loan products. By selecting a loan management system that leverages an API and supports open banking, your institution can stay competitive and capitalize on new opportunities in the digital lending space.

Look for a Trusted System with a Good User Experience and Comprehensive Support

The usability of the software and the quality of vendor support are crucial for smooth implementation and ongoing operation. Look for software that provides an intuitive interface for both staff and customers, along with comprehensive training and support services. This ensures your team can maximize the software’s benefits and deliver excellent service to borrowers.

Opt for Easy Configuration and Scalability

As your financial institution grows, your loan management software should be capable of scaling and adapting to new requirements. Opt for a system that is easily configurable and allows you to add new features or modules. This flexibility will enable your institution to respond swiftly to market changes and expand its offerings without the need for a complete system overhaul.

Consider Cost and Long-Term ROI

While the initial investment in loan management software can be substantial, it’s essential to consider the long-term return on investment (ROI). Assess the software’s potential to reduce operational costs, enhance efficiency, and boost customer satisfaction. A solution with a strong ROI will not only pay for itself over time but also contribute to your institution’s overall growth and success.

By carefully considering these factors, your financial institution can select a loan management system that not only meets your current needs but also positions you to thrive in the future of lending. Investing in the right technology today will ensure your institution remains competitive in a rapidly evolving financial landscape.

For information on Portfolio+ loan management software and to request a demo of our lending software, cloud-based banking solutions, or core banking system, contact us today!

Sources:

https://financialpost.com/fp-finance/banking/open-banking-big-changes-how-canadians-bank  (Retrieved August 14, 2024)

https://www.canada.ca/en/department-finance/programs/financial-sector-policy/open-banking-implementation/budget-2024-canadas-framework-for-consumer-driven-banking.html (Retrieved August 14, 2024)

https://www.mckinsey.com/industries/financial-services/our-insights/banking-matters/the-power-of-digital-lending (Retrieved August 13, 2024)

https://en.wikipedia.org/wiki/Loan_origination (Retrieved August 13, 2024)

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The charity golf tournament is dedicated to raising awareness and funds for Madison Community Services, a Toronto-based organization that has been supporting individuals with mental health challenges since 1981.

As a proud golf cart and hole sponsor, Portfolio+ was thrilled to contribute to this worthwhile cause which reflects Portfolio+’s commitment to making a meaningful difference. This year’s tournament was an opportunity for corporate sponsors, employees, and the community to come together for a day of golf and charity while supporting the mental health initiatives that Madison Community Services provides throughout the Greater Toronto area.

“We are always looking for ways to give back to the community, especially when it comes to supporting mental health and well-being,” said Dianne Cupples, CEO of Portfolio+. “Partnering with Equitable Bank and Madison Community Services allows us to contribute to an important cause that aligns with our values.” With a commitment to community support and social responsibility, Portfolio+ consistently works to contribute to causes that foster mental health and wellness.

To learn more about Madison Community Services, please visit: https://madisoncs.org/

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We are excited to announce that the 13th annual Portfolio+ Open charity golf event will take place on Tuesday, September 17, 2024. It will be held at the prestigious Angus Glen Golf Course in Markham, a venue known for its world-class facilities and beautiful surroundings.

As in previous years, the Portfolio+ Open is dedicated to supporting Kids Help Phone, a vital resource for young people in need of mental health support and counseling. All proceeds from the tournament will go directly to this incredible charity, helping them continue their essential work.

Registration for the event is now open, and sponsorship opportunities are still available. This is a fantastic chance for businesses and individuals alike to get involved, show their support, and make a difference in the lives of young people here in Canada. The excitement and enthusiasm from our clients, sponsors, and past attendees is already building, promising an unforgettable day of golf, networking, and philanthropy.

The event will feature a full day of activities, including a barbeque lunch, a round of golf on Angus Glen’s beautifully maintained course, on-course entertainment, a cocktail reception, an exquisite post-tournament dinner and the opportunity to win tons of awesome prizes.  It’s a perfect opportunity to enjoy a day out with colleagues, clients, or business partners, all while supporting a worthy cause.

We eagerly anticipate another successful event and look forward to seeing both familiar and new faces. Stay tuned for more information and updates as the event approaches. In the meantime, visit our dedicated event webpage to learn more about registration, sponsorship opportunities, and event details: Portfolio+ Open.

Join us in making a difference today!

About Portfolio+ Inc.

Portfolio+ banking systems and technologies connect financial institutions with fintechs and industry partners, offering a trusted platform for revolutionary banking experiences. Its powerful cloud-native core banking system and RESTful API offer a flexible foundation for secure open finance integrations and some of the industry’s most innovative Banking-as-a-Service solutions. Designed in Canada, Portfolio+ solutions are thoughtfully developed to support the evolving ecosystem of financial services technology and putting consumers in control of their financial data.

Located in the Greater Toronto Area (GTA), Portfolio+ is used by 5 of the 7* largest financial institutions in Canada, as well as Forbes’ best banks.

Portfolio+ Inc. is a part of Volaris Group Inc.

For more information, please visit portfolioplus.com.

*Based on TSE market capitalization figures retrieved in October 2023.

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Portfolio+ Inc. (Portfolio+), a leading Canadian provider of financial services systems and technologies, proudly announces its collaboration with MCAN Financial Group (MCAN) in launching a new direct-to-client Guaranteed Investment Certificate (GIC) channel powered by Portfolio+’s term deposit software, through its MCAN Wealth brand. The direct-to-client GICs are available today!

The Portfolio+ cloud-native core banking system, coupled with its robust application programming interface (API), played a pivotal role in MCAN’s initiative, launched in February 2024. Leveraging the Portfolio+’s term deposit system, MCAN seamlessly originates and manages GICs, while also harnessing the power of Portfolio+ APIs to innovate and enhance consumer experiences with direct-to-client GICs.

President and CEO of MCAN, Don Coulter, expressed enthusiasm about the new channel, stating, “The growth of MCAN Wealth and this direct-to-client channel represents our ongoing commitment to innovation and client-centric solutions. We believe in empowering individuals to invest in their financial future.”

MCAN Wealth offers a suite of GIC products tailored to meet the diverse financial goals of Canadians. Clients can benefit from competitive interest rates, ensuring steady growth in their investments. The platform is designed to be user-friendly, providing a seamless and convenient investment experience. MCAN Wealth’s GICs are eligible for CDIC insurance, providing investors with added security and peace of mind.

MCAN has seen an impressive response to the new channel. “We’re building brand awareness and generating a lot of demand through our multichannel approach to grow this line of business,” shared MCAN COO Avish Buck.

“We are happy to be a partner alongside MCAN to help them realize this strategic opportunity which will help them grow their client base,” said Dianne Cupples, CEO of Portfolio+ Inc. “With Portfolio+’s proven term deposit platform, MCAN was able to expand their offerings to a new target market and increase their overall deposit book of business by automating their workflows for selling and processing term deposits.”

Visit mcanfinancial.com for more information on MCAN’s new direct-to-client GICs.

About MCAN Financial Group

MCAN Mortgage Corporation d/b/a MCAN Financial Group is a public company listed on the Toronto Stock Exchange under the symbol MKP and is a reporting issuer in all provinces and territories in Canada. MCAN also qualifies as a Mortgage Investment Corporation (MIC) under the Income Tax Act (Canada). MCAN is the largest MIC in Canada and the only federally regulated MIC.

MCAN’s primary objective is to generate a reliable stream of income by investing in a diversified portfolio of Canadian mortgages, including residential mortgages, residential construction, non-residential construction, and commercial loans, as well as other types of securities, loans, and real estate investments. MCAN employs leverage by issuing term deposits that are eligible for Canada Deposit Insurance Corporation deposit insurance. MCAN is Investing in Communities and Homes for Canadians.

mcanfinancial.com | mcanexecutive@mcanfinancial.com| TSX: MKP

About Portfolio+ Inc.

Portfolio+ banking systems and technologies connect financial institutions with fintechs and industry partners, offering a trusted platform for revolutionary banking experiences. Its powerful cloud-native core banking system and RESTful API offer a flexible foundation for secure open finance integrations and some of the industry’s most innovative Banking-as-a-Service solutions. Designed in Canada, Portfolio+ solutions are thoughtfully developed to support the evolving ecosystem of financial services technology and putting consumers in control of their financial data.

Located in the Greater Toronto Area (GTA), Portfolio+ is used by 5 of the 7* largest financial institutions in Canada, as well as Forbes’ best banks.

Portfolio+ Inc. is a part of Volaris Group Inc.

For more information, please visit portfolioplus.com.

*Based on TSE market capitalization figures retrieved in October 2023.

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Portfolio+, a leader in financial technology solutions, proudly announces the successful deployment of its application programming interface (API) for for Equitable Bank’s Loan Origination System (LOS), “EQ Genesis.” The innovative digital lending API and integration provides Equitable Bank, Canada’s Challenger Bank and seventh largest bank by assets, with forward-thinking technology that enhances its digital banking services and provides a faster, seamless experience for its customers and employees by reducing the time it takes to approve and fund customer loans.

“We are jointly committed to making banking more convenient for customers while also providing a more engaging employee experience by optimizing their workflow with new technology. Portfolio+’s lending API integration into our EQ Genesis platform is instrumental in achieving this goal,” said Dan Broten, Chief Technology Officer of Equitable Bank. “With these tools, we can streamline lending processes, speed up loan approvals and ultimately deliver more of the world-class experiences that customers and employees have come to expect from Canada’s Challenger Bank.”

The powerful new API securely connects Equitable Bank’s existing lending system with a modern, cloud-based LOS, providing a smoother, user-friendly experience for the bank’s underwriters. The integration simplifies the entire lending process including origination, underwriting, approval and funding, which will ultimately lead to faster turnaround times for customers.

“Equitable Bank’s drive to relentlessly improve the banking experience for customers and create a more intuitive and smooth experience for employees aligns with our mission to deliver innovative solutions in Canadian financial services,” said Dianne Cupples, CEO of Portfolio+. “Our lending API ensures that customer data is shared securely, and the integrations you can create with this type of technology are about creating better experiences—both for lenders and for their customers.”

Equitable Bank, Canada’s seventh largest bank by assets, additionally uses the technology to improve file access and automate workflows by integrating platforms, resulting in more streamlined processes for employees and powerful scale.

The API-based lending solution underscores Portfolio+’s dedication to driving advancements in the financial services sector through both technological integrations and valuable industry partnerships that improve the banking experience in a more connected and responsive banking environment. The approach leads to better banking experiences for consumers, while fostering a more connected and responsive banking ecosystem.

About Equitable Bank

Equitable Bank has a clear mission to drive change in Canadian banking to enrich people’s lives. As Canada’s Challenger Bank and seventh largest bank by assets, it leverages technology to deliver exceptional personal and commercial banking experiences and services to over 639,000 customers and more than six million credit union members through its businesses. It is a wholly owned subsidiary of EQB Inc. (TSX: EQB and EQB.PR.C), a leading digital financial services company with $123 billion in combined assets under management and administration (as at April 30, 2024). Through its digital EQ Bank platform (eqbank.ca), its customers have named it one of the top banks in Canada on the Forbes World’s Best Banks list since 2021.

To learn more, please visit eqb.investorroom.com or connect with us on LinkedIn.

Media contact:
Maggie Hall
Director, PR & Communications
maggie.hall@eqbank.ca

About Portfolio+ Inc.

Portfolio+ banking systems and technologies connect financial institutions with fintechs and industry partners, offering a trusted platform for revolutionary banking experiences. Its powerful cloud-native core banking system and RESTful API offer a flexible foundation for secure open finance integrations and some of the industry’s most innovative Banking-as-a-Service solutions. Designed in Canada, Portfolio+ solutions are thoughtfully developed to support the evolving ecosystem of financial services technology and putting consumers in control of their financial data.

Located in the Greater Toronto Area (GTA), Portfolio+ is used by 5 of the 7* largest financial institutions in Canada, as well as Forbes’ best banks.

Portfolio+ Inc. is a part of Volaris Group Inc.

For more information, please visit portfolioplus.com.

*Based on TSE market capitalization figures retrieved in October 2023.

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