In late September, players in the lending space joined forces to create the Open Loan Technology Standards Working Group (OLTS), an organization whose mission is to establish open standards in the commercial lending area.
The OLTS will work to develop more-uniform processes to enable the transfer of data and documents throughout the loan lifecycle in a more-seamless manner. "The Open Loan Technology Standards Working Group hopes to introduce efficiencies to the market that no single company can deliver independently," explains Ken Katz, Loan IQ Product Manager, Misys Banking Systems (London). Misys is one of the OLTS charter members.
Katz and others in the industry feel the commercial loan market's growth is being stymied. With the introduction of standards, they believe lenders will be better equipped to create a more-straight-through processing (STP) environment in their commercial loan practices. "The use of open standards in the area of data and document transmission is the most efficient way to create a straight-through processing environment for the commercial loan market and creating greater loan market liquidity," explains Katz. "The cooperative effort to create open standards will foster a critical, ongoing examination of the processes supporting the loan lifecycle, driving future innovations and global expansion of the market." At this time, there are no plans to address the consumer lending space.
Some of the group's goals include the creation of distribution protocols and application programming interfaces to create seamless transmission of loan information, authentication protocols to enable single sign-on to any part of the information supply chain, and the creation of a taxonomy for the cataloging of documents and data.