Digital banking is hardly new, but over the past year and a half, more and more people have realized that many of their banking chores can be done through mobile apps and web browsers. In fact, a recent American Banking Association survey found that 71% of Americans wants to interact with their banking through these digital channels. And while a good part of those digital interactions are basic banking functions – checking balances, paying bills, depositing checks – more and more consumers are willing to perform high-value banking transactions through digital channels. Last year, lenders witnessed a significant growth in the number of remote loan applications.
What’s true for consumer borrowers will eventually be true for commercial borrowers. Currently in the commercial lending sector, just 11% of banks are using online or digital loan origination. Which means that commercial lenders have a tremendous opportunity to increase market share, get more efficient, and deliver a great, and highly differentiating, experience to their borrowers.
This is a golden opportunity, particularly for real estate lenders, but it’s not an easy one to take advantage of. Delivering a seamless digital experience can be a daunting task, both time-consuming and costly. It requires collaboration with new financial market entrants (fintech enterprises) and other third-parties to generate new ways of working, innovative products, and, of course, new technologies.
The reality is obvious: Most legacy systems used by commercial lenders are aging and complex, particularly in the commercial real estate sector. For example, loan calculations for commercial real estate loans are spread across multiple systems that have evolved over time. Deal sizing with multiple quotes and automation of document generation are difficult. Seamless integration between legacy systems and third-party services providers (the financial markets ecosystem) for point solutions like credit checks, flood insurance, or government-sponsored entities is a substantial problem for most legacy banking systems. Even routine data entry for things like incomes/expenses and rent rolls) can be a challenge in some legacy systems.
For commercial lenders, the digital journey is multifaceted, requiring significant effort in automation, user experience, integration, data ingestion and analytics as well as governance, risk, and compliance. For most banks, the journey proceeds in stages: first, deploying platforms. Second, rendering those platforms across all relevant business units. And, finally, marrying the digital experience with an artificial intelligence platform and interface.
The good news is that each stage of the journey will generate positive results and generate real differentiation. And completing all three stages will boost revenue, optimize costs, and significantly enhance productivity – and lead to the kind of leapfrog experience that their customers (and employees) want and expect.
Commercial real estate borrowers will appreciate the ability to get online quotes, be approved in minutes, and sign documents digitally. A well-designed digital lending experience will unlock significant revenue potential through increased application volumes, will reduce cost of manual interactions, and enhance compliance with rules and regulations. In addition, seamless integrations with a partner network will significantly reduce cycle times.
Digital lending will, inevitably, occupy a much larger share of the commercial real estate lending market. Wipro helps lenders chart, navigate, and complete this journey, and Wipro Gallagher Solutions offers a configurable commercial real estate loan origination application. Take the first step on digital journey and schedule a demonstration of today’s leading system for commercial mortgage origination. Get in touch with us to know more.