A paradigm shift: Digital lending in the “new normal”
In response to the unprecedented COVID-19 pandemic and subsequent CARES Act, the rate of adoption and utilization of digital lending technology on behalf of borrowers and lenders has increased dramatically. Look no further than the need of small businesses to provide their IRS Form 944 online as part of the Paycheck Protection Program.
When the sudden increase in the need for small business liquidity occurred, lenders who normally worked in close proximity to their teams suddenly found themselves working remotely, causing an unprecedented disruption to traditional lending processes and staff coordination—possibly temporary, or perhaps permanently. Chief Lending Officers are tasked with maintaining adherence to lending policies, procedures and regulatory compliance in this “new normal” while simultaneously maintaining loan volumes. As businesses begin to reopen and stay-at-home quarantine orders are lifted, loan demand will surge, along with unprecedented challenges in meeting that demand. Many thought leaders envision a new normal that differs dramatically from life prior to the COVID-19 crisis.
Usher in the New Paradigm – Digital Lending
Good news: technology available today allows borrowers to securely initiate and submit loan applications online 24×7 and allows lenders to work remotely and securely from any location. Using technology, lenders can quickly evaluate a far greater number of loans and evaluate their creditworthiness, oftentimes in minutes versus days, as compared to traditional processes. Digital technology can exponentially increase the speed of underwriting and back office automation, allowing banks to meet dramatic surges in loan volume and provide rapid responses to credit inquiries from borrowers—while maintaining strict adherence to the bank’s established policies and regulatory compliance. This is accomplished using secure cloud-based platforms that permit the use of any device, anywhere, anytime for both borrowers and lenders. Imagine a world where the window to accept applications for credit never closes!
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