IBS Journal June 2015


Lending software market: who is who


The lending systems market is relatively buoyant, at least for front-end solutions, as banks seek to streamline their operations to reduce costs and improve customer service. Who are the main players and which of these are in the ascendancy?


While many banks have become far more reluctant to lend than in the past, this doesn’t mean that the market for lending software has been a backwater. Indeed, it has been one of the busier sectors in recent years. Much of the focus has been on the front-end, to speed up and streamline the onboarding processes, which means auto- mated credit risk and other decision- making processes, often with an online aspect to the work.


system suppliers and has also seen a wave of vendor consolidation, as mainstream


-


all lending proposition by making acquisi- tions. There has also been heightened R&D in this area by some of the incumbents, most clearly seen in the work at Oracle FSS for both its long-standing Flexcube core banking system and the emerging Oracle Banking Platform (OBP). In parallel, the market itself has been


fragmenting, with the arrival of new lend- ing entities, some with new models such as peer-to-peer and crowdfunding, plus a


move into the lending space by non-tradi- - where there is a push to encourage new


lending in focus. Some governments have also created their own lending vehicles in


continues to boom, with a fair amount of system replacement here. There is an emphasis on improved


individual countries between those lend- ers that are highly automated and those that are not, which particularly focuses the minds of the latter when margins and inter- est rates are low. There is also a desire to improve customer service, especially the online experience, so that applications take minutes, not days or weeks. Banks need to compete on price, service and speed. Auto- mation also allows more standard advice and creates a stronger audit trail to satisfy the regulators. Having said that, the thirst for straight-


through processing (STP) in lending is not across the board. Richard Pike, sales and marketing director at UK-based Phoebus


of mortgage approvals, applications and underwriting ‘There is a definite move away from the full automation


that we saw back in the mid 2000s, with cases being


looked at more manually now following the credit crisis.’ Richard Pike, Phoebus Software


away from the full automation of mort- gage approvals, applications and under- writing that we saw back in the mid 2000s, with cases being looked at more manual- ly now following the credit crisis’. However, -


cy on the servicing side. ‘The automation is very much down to the clients’ appetite for allowing documents/information out of the system without the need for any man- ual intervention. This appetite is often driv- en by risk, with maybe simple mailshots regarding product switches going out ful- ly automatically, driven by a system diary date, whereas statements that have to be


24 © IBS Intelligence 2015 www.ibsintelligence.com


overview: lending


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