4 trends expected to shape the commercial lending landscape next year
CUs can conquer commercial lending in 2020 by focusing on member experience, partnerships, technology and training.
Earlier this month, the NCUA reported credit union loans increased 5.9% year-over-year in Q3 for a total of $1.1 trillion. Commercial loans, in particular, rose an impressive 13.2%, totaling $78 billion. This upward trend in commercial lending presents a significant opportunity for credit unions to better serve their business members and positively contribute to their own bottom lines.
However, the potential of commercial lending is still largely untapped by many credit unions, as they have traditionally shied away from this area because of its notoriously manual and paper-based nature. With 2020 right around the corner, savvy credit unions are evaluating strategies and tactics now that can help them streamline and enhance the commercial lending process next year. To most effectively embrace commercial lending and grow their portfolios, credit unions should assess the trends and activities that are anticipated to have the most impact on this space in the years to come.
Adoption of a Single Platform Philosophy
Commercial lending is often the last manual, paper-based frontier remaining in a credit union because institutions still frequently rely on disparate systems that don’t talk to one another. Maintaining multiple, clunky systems creates inefficiencies, prevents visibility into individual borrower relationships and the overall portfolio, and causes a poor member experience. In 2020, more institutions will abandon multi-platform lending systems and instead adopt a single, centralized platform approach to better and more efficiently serve all types of members – from consumers, small businesses and commercial members alike.
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