Legislative reform in the lending industry has made it increasingly difficult for banks, credit unions and financial institutions to create sustainable revenue streams. Lenders must evaluate ways to refine processes and mitigate regulatory compliance and operational risk.
The LOS space has evolved in several key ways, due in large part to changing markets and an increasingly tight regulatory environment. Looking back as far as a decade, some astute financial institutions began to realize their loan origination systems were becoming outdated and were based on technology that was increasingly difficult to maintain. But the influx of new loans at the time suppressed system upgrade projects.
As a result, the current technology landscape is rife with redundant, inefficient and incompatible systems that are increasingly costly to maintain. The long-term results of this uncoordinated growth were vertically segregated products and a business-line approach to managing borrowers.