Banking
What are banks really looking for in the lending space?
Global Banking & Finance Review®
Company
By Robert Downs, VP Product Management, Loan IQ, Finastra.
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.
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 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:
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.
How Technology Supports SME Lending | FullCirclSME financing refers to the financial support provided to small and medium-sized enterprises to help them grow and expand their operations.
Loan servicing involves the management of a loan after it has been disbursed, including collecting payments, managing accounts, and providing customer service.
Credit risk management is the process of assessing and mitigating the risk of loss due to a borrower's failure to repay a loan.
Financial technology, or fintech, refers to the use of technology to provide financial services and improve the delivery of financial products.
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