With the financial services sector evolving rapidly, financial institutions are under constant pressure to adapt. Digital transformation, shifting customer expectations and an intensely competitive marketplace are among the factors converging to drive change across the industry, including in the lending space. According to data from the Consumer Financial Protection Bureau, banks’ and credit unions’ share of first-line owner-occupied loan originations decreased from 50% in 2011 to 37% in 2023. This decline may be driven by consumer and business borrowers in search of a simpler, faster experience turning to online lenders.

For financial institutions looking to remain competitive against digital disruptors that cater to these preferences, cloud-based lending platforms support the flexible processes required to meet customer expectations. Migrating to a cloud-based lending solution like Finastra’s LaserPro cloud can enhance operational efficiency and deliver cost advantages.

As customers seek quicker, more seamless lending experiences, cloud-based lending platforms can help financial institutions boost operational efficiency and deliver on these expectations. Features like automatic updates, remote accessibility and frictionless integration with third-party services contribute to more efficient workflows and faster loan processing. For example:

• Cloud-based platforms are maintained and updated by the software vendors that provide them. Vendors are also responsible for ensuring their systems’ compliance with quickly evolving industry regulations. This allows financial institutions to focus on priorities like making improvements to customer service instead of allocating resources to system maintenance and upgrades.
   
• A cloud-based platform can eliminate the need to maintain and operate different loan document platforms, allowing institutions to consolidate all their loan portfolios within a single portal.
   
• Adopting a modern cloud-based platform also creates opportunities to deduplicate data and processes, thereby improving system performance, user interfaces and the overall customer experience.
   
• Cloud-based platforms integrate more smoothly than older legacy systems with third-party applications and microservices such as such as importing from front end origination systems or exporting to digital signing solutions.
   
• Remote access to cloud-based platforms enables internal staff to manage loan documents more efficiently, supporting stronger customer relationships.
   

In addition to enhancing operational efficiencies and streamlining workflows, transitioning to a cloud-based lending platform delivers cost advantages by reducing the need for on-premise infrastructure. This empowers financial institutions to deploy resources toward revenue-generating activities and cultivating new customer relationships. Additionally, cloud-based platforms do not require financial institutions to add servers or purchase new software licenses when adding users, which supports their ability to scale efficiently, handle increasing loan volumes and enhance profitability.

Finally, embracing cloud technology enables financial institutions to tap into advanced data analytics and integrate tools like AI to facilitate personalized services, faster response times and a better overall customer experience.

Digital transformation is an ongoing process, and adopting cloud-based technology is an integral step toward modernization. Cloud lending platforms empower financial institutions to be more agile, more competitive and better equipped to meet evolving customer needs and demands in the digital age.