The world of financial technologies has been experiencing dynamic changes in recent years. As we prepare to enter 2020, it is important to look at how the past 10 years have shaped our industry and highlight emerging trends that are likely to dominate the software development landscape in the next 12 months. Here are the top four trends that are likely to impact future software development in the year ahead.
- Multi-platform to single platform migration – Those of us providing software technology to chartered financial institutions will begin to see the demise of multi-platform lending systems. In 2020 and beyond, it will not be enough to offer separate platforms for commercial and consumer loans. The market is shifting toward single-platform technology that can accommodate all financial institution clients and loan types. This is especially true for the small business lending sector, where underwriting lines are often blurred between personal and business assets, liabilities and expenditures. In addition to a single system for consumer and commercial, the systems will also cover the entire lifespan of the relationship, from online applications and loan origination through portfolio monitoring and renewal facilitation.
- Increase in technology partnerships – In 2020 and beyond, technology partnerships and collaborations will increase in volume. Vendors are realizing that they don’t have to build everything independently. In fact, that strategy becomes self-defeating. It is much better to build to your own specialty and then partner with other technology vendors that bring their own unique skill-sets. Large loan origination systems are becoming more open, allowing disparate systems to plug in through universal ports to share data and enhance the overall experience within the environment. This is possible due to the use of Application Program Interfaces (APIs) that allow technology vendors to benefit from each other’s strengths. The result is a much more robust solution for both borrowers and lenders.
- User experience dominates production – User experience will continue to be the most critical factor to consider when designing financial technologies. No matter how many bells and whistles a system has, it will not sell if people do not enjoy using it. This rule applies to both internal financial institution users as well as consumers. The easiest way to ensure a positive user experience is to keep the interface simple. The best approach is to have an interface that is easy to understand while keeping a lot of meaningful data just below the surface. This “drilldown” technology allows the user to gain easy access to the underlying information as needed. Building technology in this manner serves a much wider audience, all within the same system.
Consideration for the key users is critical and should provide dashboard views for all roles, from the executive wanting bottom line stats to the lenders looking for underlying performance data as well as operators attending to tasks throughout the workflow. Consideration for the key users is critical and should provide dashboard views for all roles, from the executive wanting bottom line stats to the lenders looking for underlying performance data as well as operators attending to tasks throughout the workflow.
- Implementation and user training will be key to establishing long-term vendor relationships – Systems must be built to accommodate easy implementation and training. By building simple and intuitive multi-user interfaces, you are designing systems that almost allow users to train themselves. This also serves to streamline the entire process of system documentation, training, and implementation. By incorporating efficiency tools such as online help and workflow protocols into your system, you are truly building a system with the end user in mind. The process of documentation, training and implementation is more challenging in a world where technology vendors share data through open APIs as discussed previously. It is important that these resources be created throughout the process of system development and not simply as the last piece of the puzzle.
While we expect these four trends to dominate in 2020, they are just a few of the innovations now shaping the lending landscape. For more on emerging trends in software development and a look back at the most meaningful changes from the last decade, we invite you to download our newest eBook, Ten Innovations Changing Commercial Lending Into 2020.
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