Conditions within the commercial lending sector during the past ten years have led financial institutions to seek greater efficiency throughout the loan fulfillment process. The demand for more integrated lending platforms is produced by three distinct market conditions:
- The rise of alternative third-party lenders since 2010.
- The need to increase production speed and reduce costs, in part due to the competitive pressures created by the new alternative lenders along with historically low net interest margins.
- The need for data integration to allow previously disparate systems to communicate with each other.
This third item, data integration, will make it much easier for institutions to manage risk and comply with upcoming changes to the loan loss recognition standards put forth by FASB.