The global digital lending market is accelerating — and fast. In fact, according to recent predictions, it is set to grow from $10.7 billion in 2021 to $20.5 billion by 2026. Given shifts in how technology is distributed, when lenders utilize digital channels to originate and renew loans, their technology almost always relies on the cloud.
This presents a significant opportunity for lenders who can tap into consumers’ digital demand using cloud-based technology.
What is cloud-based technology?
Cloud-based technologies are scalable and elastic solutions that are delivered as a service via the internet, usually on a pay-as-you-go basis. With the cloud, users can save information to a remote database instead of depending on physical devices to crunch, process, and store data.
These technologies are increasing in popularity. In fact, it is expected that 80% of all enterprise and mission-critical workloads will move to the cloud by 2025.
Cloud-based technology includes different types of cloud services, such as software-as-a-service (SaaS) and platform-as-a-service (PaaS). SaaS companies make their services available over the internet, while PaaS is a platform for creating software that is delivered online.
What are the benefits of the cloud?
Anywhere and anytime access
When a solution is based in the cloud, users can access it from any device, anytime and anywhere. All they need is an internet connection.
Cloud-based service providers have a responsibility to keep information safe and secure and are governed by strict regulations. As a result, they invest huge sums on security measures — far more than the typical business can afford to do themselves.
Technology evolves fast. With a cloud-based solution, businesses can be sure they always have access to the most up-to-date software.
Fewer IT headaches
With a cloud-based solution, many IT problems are outsourced. The cloud software is hosted, maintained, and upgraded by the service provider, removing the burden for the user and improving return on investment at the same time.
Building your own solution can take months, if not years. Implementing a cloud-based solution can be done in a matter of hours.
With cloud-based technologies there are typically no significant upfront investments — users pay a fixed, regular fee per month.
How can the cloud transform lending?
The lending industry has a reputation for being outdated. Lending processes often rely on laborious tasks, many of which are completed using disparate technologies with outdated user interfaces. In fact, research suggests that 30-40% of lending resources’ time is spent on non-core tasks due to disaggregated systems and manual processes.
But updating systems can be time and cost-intensive. Many of today’s lenders don’t have the resources to support complex technology implementations. This is where the cloud can make a huge difference.
Cloud lending solutions typically don’t require financial services organizations to rip and replace their existing core services. Instead, they offer integrations that connect new technology with older systems, and once connected, the new functionality can be simply switched on. Automatic software updates are the modern replacement for stressful and inconvenient upgrade procedures, which historically have been a drain on lenders’ IT teams. Overhead is reduced too — lenders may no longer need to invest in their own server, networks, and other expensive infrastructure.
And this is just the start. Ultimately, a cloud-based solution can help to modernize the entire loan process. Borrowers can benefit from a consistent loan application experience, on their preferred device and regardless of their location.
This consistent experience benefits lending teams too, especially when historically disparate workflows become centralized in one environment. This can help teams become more efficient, which can lead to faster close times and increased volume.
See how a cloud lending platform can help you, with Blend
Existing lending technology has tied loan officers to their desks and computers for too long, limiting when and where borrowers can access them.
Blend’s cloud-native platform allows loan officers to manage their business, including borrower requests and applications, on the go. They can meet customers over a coffee and go through the application from a mobile device. Or they can start the application together at a computer in the branch, and then the borrower can go away and complete it out-of-hours in the comfort of their own home, picking up exactly where they left off.
But this anywhere, anytime access isn’t the only benefit of Blend’s cloud-based approach. The cloud has also provided the agility necessary for our offering to evolve. We can add new functionality to our platform quickly, and then put it in the hands of lenders in just a few clicks. This level of flexibility has benefited customers like M&T Bank. Our partnership during the heart of the pandemic allowed the M&T team to help support 718,000 employees who needed help during a trying time through SBA loans.