10 LOAN ORIGINATION TRENDS TO WATCH IN 2024

The loan origination market is experiencing growth, driven by factors like the increasing adoption of digital loan processing tools and increased demand from specific sectors. Market research suggests the global loan origination software market could reach close to $9 billion by 2028, with a focus on automation and improved customer experience through technologies like AI. However, high interest rates, data security, and stricter regulations are challenges alongside this growth. The table below details the loan origination trends to watch this year.

10 Loan Origination Trends to Watch in 2024
Trend	Description
Generative AI	Building objective pre-screening criteria and synthesizing the information for credit underwriting.
No-Code Solutions	Enabling lenders to build and customize loan origination software without extensive coding.
Alternative Lending	Increasing use of non-traditional lending sources, such as peer-to-peer lending and crowdfunding, offering more options for borrowers.
Embedded Lending	Integrating loan origination directly into other platforms, such as e-commerce and real estate, for a seamless borrower experience.
Social Media Integration	Leveraging social channels for marketing, lead generation, and borrower engagement.
Multiple Payment Methods	Offering diverse payment options, from wire transfers to credit cards, that cater to borrower preferences.
Focus on Customer Experience	Enhancing the borrower experience with personalized services, faster processing times, user-friendly interfaces, and AI-based loan product advice and offers.
Automation	Use of automated systems for various tasks, including decisioning, conditioning, deal structuring, funding, and document management, reducing manual errors and speeding up the approval process.
Data Analytics	Using data analytics to gain insights into borrower behavior, market trends, and operational efficiency.
Open Banking	Leveraging open banking APIs to access financial data from various sources, improving loan underwriting and risk assessment.

Technologies to Leverage Loan Origination Trends

Lenders can leverage loan origination trends by focusing on technologies that improve efficiency, security, and the borrower experience. Here are some key technologies lenders can use:

• Cloud-based LOS System: Cloud-based LOS provides lenders with scalability and accessibility. The system can be accessed from anywhere with an internet connection, and updates are automatic.

• AI and Machine Learning (ML): AI and ML can automate tasks like document verification, fraud detection, and credit underwriting. These technologies free up human loan officers for more complex tasks and enable faster loan approvals.

• Open Banking Technology: Open banking allows lenders to securely access a borrower’s financial data directly from their bank accounts using APIs. This eliminates the need for manual data entry and streamlines the application process.

• Process Automation: This technology automates repetitive tasks like data entry and document processing, improving accuracy and reducing processing times.

• Data Analytics: Lenders can analyze large volumes of data to better understand market trends and borrower behaviors and gain insights into customer preferences and marketing strategies.

• Digital Content Repositories: A digital content repository helps lenders manage loan documents efficiently.

Lenders can leverage these technologies to improve efficiency, reduce costs, enhance customer experiences, and stay competitive in a rapidly evolving financial landscape.

defi Provides Industry-Leading Loan Origination Technology

defi’s origination platforms make lending more productive and efficient, allowing lenders to be more competitive, run their businesses their way, and increase value. With defi’s loan origination platforms, you get:

• Automated decisioning, conditioning, deal structuring, and funding to maximize return on investment while controlling risk.
• A cloud-based platform that eliminates downtime and provides lightning-quick processing times and scalability.
• No-code configurability for workflows, rules, policies, features, the decision engine, and admin functions.
• Mobile apps fully integrated with defi’s origination platforms.
• Integrated data analytics capabilities.
• APIs and the ability to build and modify integrations on the fly.
• Customer-facing portals and other technology to improve customer service.
• Integration with a broad ecosystem of third-party services and partnerships, such as compliance and risk management services.
• Support for complex pricing matrices and models.
• Foundational support for advanced functionality such as AI, machine learning, and digital identity verification.

The benefits of an industry-leading loan origination platform are clear. Improved customer satisfaction leads to revenue growth for lenders. So let’s talk about what you need.