Six months ago, the lending industry was operating much as it had done for many years. Where other financial services organizations have seen significant advances in the availability and adoption of technology to automate and streamline operations, paper forms are still commonplace for lenders. These forms are often walked from one side of the office to the other, and handed from one staff member to another, with a notable lack of straight through processing.
As the COVID-19 pandemic spread across Europe, the UK government advised employees to work from home if they possibly could, and many firms had to furlough staff. Four months on, the scenario whereby two (or more) workers are in the same office passing paperwork between them seems unlikely to re-emerge any time soon. So where does this leave the lending industry?
As firms engaged their business continuity plans (BCPs), the lack of automation and digitization came into sharp focus. What had once been a seemingly-optional investment in radical technological change, which could be kicked into the long grass, became the differentiator between those who could adapt to the “new normal” and those who could not. On top of this, lenders received an overwhelming number of applications for loan forgiveness, mortgage holidays and business relief loans as their clients struggled in the COVID-19 environment. Businesses also sought relief under the UK’s government-sponsored Coronavirus Business Interruption Loan Scheme (CBILS), or the US Paycheck Protection Program (PPP), and demand from small and medium-sized enterprises has often exceeded the capacity of banks and non-bank lenders.
Lenders are experiencing significant increases in volume, which is straining their operational capacity to its limits, while many of their staff are on furlough or working from home without adequate support from legacy systems. SS&C recently published a whitepaper “Challenge Equals Opportunity: Lessons for Lenders from COVID-19,” which considers how some lenders are using this situation as a catalyst for change, and where they are focusing their efforts. Download the "Challenge equals opportunity: Lessons for lenders from COVID-19" whitepaper to learn more.
Commercial Lending, EMEA