SS&C Technologies Holdings Inc.
09/24/2021 | News release | Distributed by Public on 09/23/2021 22:46
Improved transparency in commercial lending: Wish granted
Transparency is not a recent addition to the commercial lending stakeholder's wish list. Since the global financial crisis of 2008, transparency has become an even more urgent, yet seemingly unachievable need.
The unique nature of commercial lending makes transparency difficult
Commercial lending is complex in ways that set it apart from other areas of investing. We see this in ever-evolving deal-making innovations, economic shifts and regulatory requirements. We also see this in rotational trends such as repurposing shopping malls and numerous new data warehouse projects that are underway in 2021. The industry is currently dealing en-masse with specifics related to these types of projects, but both will "rotate out" of popularity in time and lenders will adjust to the next trend.
To achieve consistent and meaningful transparency in commercial lending, you need a set of tools and capabilities that allow you to analyze and share copious amounts of unique data with all interested parties (borrowers and lenders) in a timely-and customized-manner. It sounds like wishful thinking.
Let's look at three transparency challenges that servicers and lenders would like to solve for-along with some possible solutions that don't require a magic wand.
Lender's Challenge 1: How can I meet complex reporting requirements with non-standardized data?
It's getting easier to deliver transparency with standardized data. In commercial lending, however, data inputs are anything but standardized. The data you must report on can encompass everything from information on one-of-a-kind collateral, to third-party lenders, to other bespoke loan features and terms. So, how do you create a holistic view of non-commoditized/non-standardized information and deliver it to multiple stakeholders across numerous loans effectively and efficiently, in an accurate and timely manner?
Modern technology exists today that can process non-standardized information and documentation leveraging AI-based innovations such as Natural Language Processing (NLP), Optical Character Recognition (OCR) and Machine Learning (ML) to efficiently collect, scan, parse and digitize key data elements from non-standardized documents. This digital information can then be automatically fed and populated into a common, web and mobile-friendly, cloud-based application that is accessible to borrowers, lenders and other interested parties. Such technology is able to connect what would traditionally be disparate functions, and provide easy to read, timely analyses and reports that create transparency where it may not have existed before.
Lender's Challenge 2: With such bespoke terms, how can technology support collaboration?
With be-spoke terms, conditions and variables that can affect each commercial lending transaction; having the ability to collaborate closely with all interested parties is growing ever more critical. And --better experiences for borrowers and investors matter, so if your platform isn't intuitive and user-friendly, retention rates can slip.
Some modern lending platforms accommodate both borrowers and lenders, providing each with a tailored perspective, while simultaneously allowing for seamless collaboration, information sharing, self-servicing capabilities and customizable dashboard views. This ensures that all parties stay on the same page and keep in sync, while still having the ability to view data, reports and analytics from their respective vantage points.
Lender's Challenge 3: Outsourcing has advantages, but what about transparency and oversight?
As your commercial loan activities scale in volume, size and complexity, you may want to consider an outsourcing partner that can handle the loan from an origination, servicing, asset management, accounting, or regulatory and reporting perspective. But, how do you do this without losing transparency or oversight of the process to ensure that your borrowers and investors continue to have positive experiences?
There are outsourcing partners who offer both commercial lending expertise and modern technology. Such partners efficiently accommodate the volume and complexity of your loans while providing you and your stakeholders with real-time, online transparency into the status of your lending activities, along with the relevant data, documentation and analytics to properly account for and report on them.
Transparency is at the heart of many commercial lending challenges, but many legacy platforms still in use today fail to deliver it. As a result, reporting and collaboration can suffer, along with overall operational efficiency.
With the right mix of technology, experience and expertise, transparency in lending need not remain on your "wish list." We created the Precision LM Lender's Viewpoint Portal specifically for lenders, investors and participants who desire a more modern web-based experience that delivers on the need for transparency. Lender's Viewpoint provides secure online access to comprehensive loan information and associated reporting on a 24/7 basis from any desktop, tablet or mobile device.
Learn more about the Lender's Viewpoint portal.