IBS Journal July 2017
struggle with the legacy systems currently in use for lending which limit customer engagement strategies and often do not support new channels. This makes it harder for banks to launch new products, and to this end rely heavily on lending system suppliers to provide them with modern solutions that can integrate with their legacy systems. Suppliers have consequently stepped up to fill this need and offer cutting-edge lending solutions built with a modular design to help banks to compete with alternative lenders.
A common trend amongst suppliers is the focus on cloud-based lending solutions which cater to small and mid-sized banks and other financial institutions. Very few banks have completely digitised their lending process and doing so now is an expensive affair. Cloud-based solutions offer banks the ability to use the latest systems and technology at a fraction of a cost without the need to spend on the infrastructure and maintenance of advanced servers and systems.
With advances in data security and performance quality, Cloud-based solutions are proving to be quite popular amongst these mid-sized and small banks. Specialist lending system suppliers such as Nucleus, and heavyweights such as Temenos and Sopra’s Cassiopae, offer both cloud and the older hosted license models.
The other trends amongst lending system solutions being offered by suppliers is the use of analytics. These play an important role in lending capabilities, especially with the rapid digitisation of data now taking place. Predictive analytics, based on real time data, offers banks the ability to cater to a wider customer base while disbursing loans. This also helps reduce the time taken to process
and disburse loans – one of the key areas where banks have fallen short when competing with fintech companies offering lending products.
Suppliers are developing products to cater to bank needs. Nucleus offers a lending analytics product that uses sophisticated predictive scoring models to allow various financial institution stakeholders to create scorecards that span the entire loan management life cycle—from lead generation to collection. Misys is reportedly also launching software to enable banks to provide peer-to-peer lending to their customers. The technology would enable retail and corporate banks to connect their customers looking for loans with individual or institutional investors digitally.
The demand for lending systems is expected to continue in the coming years as banks work towards complete digitisation of the lending process. Suppliers will need to constantly evolve in terms of their product offerings in order cater to the needs of banks and financial institutions. Cloud-based lending solutions and mobile solutions are likely to be the recurring theme for some time as small and mid-sized banks opt for the most cost effective way to upgrade their legacy systems.
In terms of geography, the community banks in the US are likely to be one of the key consumers of new lending products, especially cloud based solutions. It is no wonder that suppliers such as Temenos entered into the US market through its acquisition at the opportune time. Temenos has even setup a regional headquarters in Pennsylvania for its North American business. The small and mid-sized banks and financial institutions in Asia, especially India and the South East Asian markets, are also expected to be key markets for lending solutions.
21
www.ibsintelligence.com
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52
