The industry is likely to witness more regulations to protect borrowers, and banks will be held to an even higher level of scrutiny from auditors. Therefore, risk mitigation becomes even more important due to the numerous regulations being enacted. With lending technology already in the market today, banks can better manage and control risk factors, and adapt to any regulatory changes. The same technology also can provide automated reporting functions to help bank managers access data and ensure they remain compliant.
In general, the Internet, among other forms of media, has helped borrowers become more educated on the lending process. This has been amplified with the credit crisis, as more consumers want to be aware of lending issues and trends before they apply for a loan. Thus, they are coming to lenders with more information and questions. Therefore, it's very important that all bank employees understand current lending rules and regulations so they can accurately and informatively address potential borrowers.
In addition, more banks and financial institutions are opening alternate lending channels, such as online application submissions, that require the same level of compliance and monitoring as personal, face-to-face interactions.
We don't foresee any lending outsourcing due to the availability of automated lending solutions in the marketplace. That technology is designed to make lending processes and employees faster, more accurate and more efficient. Therefore, banks can manage additional loan business and issues without dramatically increasing their staff.