Technology rules on the long road back to lending

8 March 2010

Long-term lending prospects are only as secure as the length of a lender’s loan agreement and a return to loan origination will be key to the survival of the fittest lenders in future.

Equally important to survival will be the relationship between people and processes in the lending sector. The two must work in harmony if lenders are to emerge fit for action when the market turns.

But how can existing technology better support people time when many lenders face the challenging question of how to become more flexible without losing control?

The answer lies in three simple words - business rules management. BRM is not a new phenomenon but until the credit crisis many lenders had not latched onto the business benefits the process provides.

A lot of organisations have either electronic document management or business process management systems in place.

BRM is the glue that binds the two together in an intelligent way, bringing out the value of a combined solution.

For example, BRM can control information flowing in, such as payslips and bank statements, enabling these to be routed electronically for review as part of the packaging process.

BRM lets lenders rapidly adapt to a changing market by varying products as well as lending strategies

Like EDM and BPM, BRM is cost and time-efficient, and offers lenders increased flexibility along with greater control over their business.
Where BRM provides additional value is that it is user-friendly and enables lenders to rapidly adapt to a changing market, whether this is in controlling the flow of work through the organisation or quickly changing product features and lending strategies.

BRM does away with lenders’ reliance on technology to recode legacy systems. Instead, it allows plain English for rule definition, making the process more accessible.

BRM is likely to be a big growth area this year and a key driver when it comes to optimising business performance.

The current lull in the market means this is a good time for managers to plan ahead.

At the moment their focus should be on reviewing, selecting and implementing appropriate automation solutions if they wish to guard their competitive edge.

Of course, automation should only be used where it adds value. In this way an organisation’s most valuable resources - its people - are freed up to concentrate on the front end. And with lenders, that means originating new loans.

We anticipate that there will be increased demand for transparent underwriting, more sophisticated arrears management systems and early warning systems in the next phase of recovery.

The lenders that fully embrace technological change now will be the ones that emerge in best shape to face the future.