Build vs. buy software: Tailor-made or off-the-shelf LOS?

When it comes to providing a seamless customer experience, finding the best software for your business is often like buying a new suit: One size doesn’t fit all.

The biggest decision faced by some larger lenders is whether to continue investing in a custom-fit loan origination software (LOS) tailored to your business, or whether to purchase an off-the-shelf solution.

A thorough understanding of the pros and cons of each option is crucial in finding the best fit for you.

Control and Flexibility

Building a custom solution gives you complete control over your LOS. You can decide which changes to make and when to make them. A tailored system done well can provide a truly bespoke set of features for a lender’s business.

With homegrown software comes obligation, you’ll be responsible for the investment of building new features, keeping up with technology upgrades and compliance changes.

A common misconception regarding a vendor-provided solution is that it takes away your ability to control the product roadmap. However, the right LOS vendor will rely on customer feedback to build and maintain their product roadmap. They should also be flexible in their approach in order to time deliveries based on your business needs.

Many off-the-shelf solutions address the key needs of most companies in the financial industry, and at a much more affordable price point than a custom-built solution. If you search carefully, you’re likely find an industry-proven LOS solution that meets your needs and resolves your pain points.


Choosing the build route allows you to fully customize your LOS to have the screens, workflows and configuration for all your business needs. A key downside of an in-house solution is that it can leave you highly dependent on those who designed the system.

For a vendor provided LOS, several mid- to high-tier off-the-shelf loan origination platforms give lenders the same flexibility. This is met either using robust configuration capabilities, or the ability to add customization layers on top of a standard product.


Third-party integrations aren’t always guaranteed with off-the-shelf solutions, especially if you have many in-house systems. Your custom solution can be built to integrate with both your internal systems and third-party vendors.

However, integrations are costly to both build and maintain. Going with a vendor-provided solution allows you to outsource the cost of integration and maintenance of standard third-party providers.

Speed to market

Lenders with in-house solutions often find that changes take longer to implement. This is due to the growing complexity of your technology stack and an increased demand on IT teams.

Outsourcing a portion of these changes allows lenders to supplement their in-house IT teams with vendor expertise to deliver changes quickly.


In summary, the ideal LOS solution will allow you to build a scalable, profitable and secure lending business.

Though choosing between a ready-made solution and a custom piece of software is not easy for a business, ensure to consider the long-term ramifications of choosing between building or buying an LOS, and pay attention to the options that are most suitable in practice, not just on paper.

With customization comes the task of staying up to date with current upgrades, however vendor-provided solutions will already have these features and upgrades as part of the product roadmap.

It’s not an all-or-nothing proposition; lenders who are gradually moving away from in-house solutions can adopt specific features from an LOS without moving to the full solution.

Atlanta, Ga.-based White Clarke Group provides end-to-end retail and floorplan finance software solutions to more than 100 banks, captives and independent lenders globally.

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