Banking
What are banks really looking for in the lending space?
What are banks really looking for in the lending space?
Published by Wanda Rich
Posted on April 2, 2025
By Robert Downs, VP Product Management, Loan IQ, Finastra.
What are banks really looking for in the lending space?
Plotting a route towards efficient and automated loan servicing for high-volume bilateral lending
Financial institutions lending to small and medium enterprises (SMEs) recognize that while demand for business loans is on the rise, challenges such as competition from new market entrants, understanding bilateral loan servicing needs, and evolving customer expectations are also growing.
A report by the Office for National Statistics (ONS) indicates that approximately 48% of UK small businesses are looking to lenders to help fund their expansion in 2025 . To service this market, banks must utilize technology to simplify their loan servicing workflows, which are currently too complex and time-consuming. Banks should also leverage technology to minimize the risk of human error caused by manual processes and the lack of guardrails when servicing a high-volume market.
At the same time, banks face resource constraints due to complexity and training requirements, all while needing to lower TCO and ideally consolidate lending platforms. These problems are not new or unknown to banks already on their modernization journey, but they are significantly magnified when servicing high-volume bilateral lending, as banks are less able to rely on manual processes, even in the short term.
Introducing Loan IQ Simplified Servicing
To help banks in effectively managing their SME and commercial lending workflows, Finastra has developed a thin client user interface on top of Loan IQ, called Simplified Servicing. Featuring intuitive interactions and fast pathways built on Loan IQ’s proven lending platform, Simplified Servicing is dedicated to servicing high-volume, bilateral or SME loan portfolios.
How can you ensure that you are developing a solution that meets the needs of lenders and the market, especially for the broad SME sector? Finastra conducted peer reviews with leading financial institutions around the world to gather insights on what banks truly seek.
| Persona | Role | Responsibilities | Focus | Impact |
|---|---|---|---|---|
| Loan operations manager | Manages work queues and distributes tasks | Ensures efficient workflow and task allocation | Optimizes team performance and workload balance | Needs to enhance operational efficiency and team productivity |
| Deal setup specialist | Sets up deals, facilities and collateral for new loan bookings | Ensures accurate and timely setup of loan-related transactions | Detail-oriented, strong organizational skills | Needs technology to smooth initiation of new loans and maintaining data integrity |
| Servicing specialist | Processes high volumes of bilateral servicing transactions | Supports frontline teams and clients with transaction processing | Efficient, detail-oriented, strong multitasking abilities | Must ensure smooth and accurate servicing of loans, enhancing client satisfaction |
| Quality assurance checker | Reviews, approves, and releases transactions | Ensures accuracy and compliance of transactions made by others | Detail-oriented, strong analytical skills, thorough understanding of loan processes | Tasked with maintaining high standards of accuracy and reliability in loan servicing |
The result: Five key themes identified
The peer review highlighted five key themes related to servicing high volume bilateral loan transactions. In combination, they reveal demand for a streamlined, efficient, and customizable user interface and experience:
- Streamlined onboarding to reduce time to funding: reducing input time, improving workflow, minimizing errors, eliminating rekeying, and simplifying origination output.
- user experience and interface to boost efficiency: streamlining high volume transactions, adding error-reducing guardrails and creating intuitive steps for users.
- Collateral management to create compliant and centralized collateral monitoring: avoiding using multiple systems for collateral management that can cause data inconsistencies, errors and delays.
- Workload distribution to improve visibility and customizable work in progress: delivering better visibility and reporting to reduce risk, while improving user satisfaction.
- Mass data processing to save time, reduce IT involvement, and empower users: supporting a user-friendly interface for mass data updates to improve accuracy and enhance flexibility.
The banks have spoken! Reducing complexity, simplifying workflows, and consolidation are highly sought-after benefits of a single technology platform for servicing high-volume, bilateral or SME loan portfolios.
As the lending market continues to evolve, Finastra remains committed to enhancing Loan IQ Simplified Servicing to ensure that banks remain as competitive as possible when serving their SME customers. To learn more click here.
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