Selecting a Loan Origination System (LOS) is more than an IT decision—it’s a strategic inflection point. For credit unions navigating digital transformation, evolving member expectations, and tighter compliance demands, the LOS serves as the operational engine of lending. The right platform enhances digital lending journeys, simplifies regulatory complexity, and enables scalable, member-centric growth.
But making that choice isn’t just about features. It requires a holistic framework for evaluating how an LOS can empower long-term success. This checklist breaks down the nine essential criteria to guide your decision.
What to Look for in an LOS: Nine Strategic Dimensions
1. Align with Your Lending Strategy and Growth Goals
Begin with a clear understanding of your credit union’s goals. What products do you offer today—mortgage, auto, personal, small business—and what’s on the horizon? How do you want members to apply—mobile-first, omnichannel, or in-branch hybrid? Align LOS selection with your digital roadmap, loan growth targets, and member experience ambitions.
Pro tip: Anchor every requirement to how it improves the end-to-end member journey.
2. Match Functional Depth to Core Lending Needs
Your LOS must natively support your full suite of lending products, from automated mortgage underwriting to rapid decisioning on auto loans. Look for configurable platforms that allow business users to adjust rules, workflows, and credit policies via low-code tools.
Look for:
- Prebuilt integrations with credit bureaus
- Dynamic decisioning engines
- Industry-specific compliance templates
3. Prioritize Scalability and Cloud Performance
Can the LOS handle surges in volume—like year-end mortgage spikes or seasonal auto loan promotions? Cloud-native platforms with elastic scaling and multi-region resiliency offer better long-term performance.
Ask vendors:
- What are your uptime SLAs?
- How does the platform handle performance during peak origination?
4. Optimize for the Digital Member Experience
Modern borrowers expect Amazon-like convenience. Your LOS should deliver:
- Mobile-optimized applications
- Real-time status tracking
- Secure document uploads and e-signatures
- Self-service tools like prequalification calculators
Stat: 65% of borrowers now expect fully digital loan experiences (Source: Fiserv, 2024).
5. Evaluate Integration Ecosystem Strength
Your LOS must connect seamlessly with your core banking system, fraud tools, CRMs, and other third-party services. A robust API layer and prebuilt integration marketplace dramatically reduce implementation time and future upgrade pain.
Key integrations include:
- Core platforms (e.g., Wealthview, DNA)
- Identity verification (e.g., Jumio, Equifax)
- Provincial form libraries and regulatory reporting tools
6. Ensure Compliance, Security, and Risk Resilience
Compliance isn’t optional. Look for platforms that offer:
- Configurable rule engines to match provincial/federal regulations
- Complete audit trails and reporting
- Third-party certifications (SOC 2, ISO 27001)
- Proven disaster recovery and incident response protocols
7. Calculate Total Cost of Ownership and Vendor Viability
Beyond sticker price, assess:
- Implementation and training costs
- Support and maintenance fees
- Pricing models (subscription vs perpetual license)
Just as important: vendor stability. Choose partners with strong credit union experience, solid financials, and long-term product vision.
8. Validate with Peer Feedback and Real-World Testing
Don’t rely solely on vendor promises. Request references from peer credit unions and ask:
- How quickly did they go live?
- What surprises emerged during implementation?
- How do staff and members rate the experience?
Run pilots or sandbox tests to validate functionality, ease of use, and integration fit.
Why Credit Unions Trust Covaleyo
For over two decades, Covaleyo has been the trusted partner of Canadian credit unions seeking lending modernization without sacrificing member values. Our flagship LOS, ProLender, is purpose-built for credit unions—with:
- Pre-integrated provincial form libraries
- Seamless core integrations (including Wealthview and DNA)
- Configurable decision engines
- Community-driven product evolution
Whether you’re modernizing mortgage workflows or launching new digital channels, Covaleyo delivers fast deployment, compliance-readiness, and an experience your members will love.
Get the Checklist: LOS Evaluation Guide for Credit Unions
Want a ready-to-use checklist to help your team evaluate LOS options?
Download the Free LOS Evaluation Checklist or edit the document here.