Key Architectural Foundations for Today’s Modern Lending Technology

This weekend my youngest was mesmerized by a communication artifact of the past – my old flip phone.  Somehow this flip phone had dodged the many trips to be upgraded, donated, or even just recycled in a tech disposal event.  He was amazed at the design and that it even worked at one point in its life, and this opened up a wider discussion around topics like – wait for it – rotary phones and yes, even telegraphs (I did actually get telegraphs when I lived in Brazil as a youth). Again, mind blown for my pre-teen.

But it made me think about banking and how far lending technology has come, with where we are going with lending technology today, and how it is going to change in just even the next couple of years. Here are a few of the key areas I think every banker needs to look at in strategizing their lending technology needs.

Accessibility to APIs and Microservices

When you think about communication consider that in 1805, news of the Battle of Trafalgar – which took place on October 21 was delivered to the admiralty on November 6. Fast forward to 1872 after the intercontinental telegraph cable was laid and it became possible to send a message to Australia immediately from London. This changed the way the British Empire operated.

Today with API’s and microservices we have the ability to share critical decision making information from one provider to another securely, leveraging the insights that one lending technology platform may have to allow a completely holistic view of risk. Completely different then even 20 years ago when your leasing, commercial lending, treasury management, and deposit solutions were all in completely different silos and rarely shared information simultaneously or completely. This is a significant gain for your banking ‘empires’, so that they can make the very best choices.

Business Rule Automation

Just as the railways, telegraph and telephone made messaging much faster – in some cases almost instantaneous. Business rule automation initiatives can leverage lending technology to do the same for many of your financial institution’s key projects and initiatives. Thinking of expanding into a new vertical or product line? Imagine aligning your well thought out business process with automation to streamline decisions and ensure that great decisions are being made systematically across the organization. Building out business rule automation within your lending technology helps you avoid getting to the point where key decision makers are being driven into the ground by sheer will versus a well thought out plan.

Cloud Based Solutions

Some readers may remember that extended rotary phone cord that you purchased at Radio Shack that bought you an extra 25 feet of privacy on those phone calls (google it if you have no idea of what I am talking about). But in today’s world, why even have limits?  If your lending technology is not providing you the flexibility to expand resources and expand accessibility with it being on a cloud platform, then time to reconsider the strategy at hand. Not only do your customers demand 24-7 access, your bankers will also demand that same 24-7 access so that they can have increased flexibility in how and when they will serve your borrowers. 

As modern lending technology continues to evolve, it’s imperative for today’s banks and credit unions to embrace the changes. So as you read this on your iPhone/Android (I mean who would really consider even printing this out or want me to mail it to you), I hope that you can get the message loud and clear – change is here and you need to accept it and hear what it is saying.

Author Bio

With more than 25 years of experience in the financial services industry, Mike Horrocks possesses a unique and extensive blend of financial expertise, technology skills, process redesign abilities and solution management experience. Horrocks’ background enables him to create go-to-market strategies for new solutions, help clients convert strategies into revenue generating initiatives and forecast market direction.

As the Vice-President of Product Management at Baker Hill, Horrocks’ responsibilities include the identification and development of new market opportunities in the business of lending, risk management, and analytics for financial institutions. Mike holds a MBA both in International Finance and Venture Technology Management from Indiana University and a B.S in International Finance from Brigham Young University.

Before joining Baker Hill, he held executive positions within several other organizations, including Experian, Profit Technologies, SAIC, Broadway and Seymour (FIS), Zions First National Bank and Zions Data Corporation.

Horrocks is a member of many associations including the Risk Management Association and Bankers Without Borders. In his free time, he enjoys traveling internationally with his wife and five children.