Overview

Today’s commercial lenders and financial institutions face increasing complexities from regulatory reform and economic uncertainty to rising client demands. Despite the market’s state of chaos, there are also opportunities driven by supply chain resilience, public and private market dynamics, and a growing borrower preference for commercial lenders over public markets or venture capital.

To succeed, commercial lenders must embrace the right technology. Those that adopt the right tools and processes will be better equipped to increase efficiency, manage risk, maintain compliance, and drive growth.

Accessing the current market

Commercial lenders face mounting pressure to do more with less, to modernize their operations while mitigating new and magnifying risks. Some significant challenges faced by today’s commercial lenders include:

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Credit risk and borrower defaults
Economic uncertainty — stemming from the lingering effects of inflation, geopolitical instability, and high interest rates, among other issues — continues to shake borrower health and intensify risk for lenders.
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Liquidity and funding pressures
Reduced market liquidity is limiting lending capacity and raising costs for many lenders. High interest rates and market uncertainty are also driving depositors to seek higher returns elsewhere, which creates funding pressures and strains on liquidity.
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Regulatory compliance
Adapting and adhering to stricter and ever-changing lending rules is another challenge. At the same time, compliance costs are rising, with financial organizations required to update their policies, reporting systems, and underwriting standards
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Client expectations
Customers are demanding faster, more personalized service from their lenders. To compete with fintechs and digital-first companies, financial institutions must move away from slow, paper-based processes and offer seamless, multi-channel experiences.
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Talent acquisition and retention challenges
Faced with tightening budgets, financial institutions are struggling to hire and retain talent. This makes it difficult to scale operations, modernize technology, and ensure business continuity.
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The role of artificial intelligence (AI)
AI and machine learning are helping lenders streamline underwriting and risk assessment. However human oversight remains critical due to concerns over bias, transparency, and regulatory scrutiny. Lenders must balance the efficiency benefits of AI with the need for responsible use.
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Digital transformation and fintech competition
Commercial lenders also face pressure to keep up with lending platforms of fintech firms and digital banks, which use advanced technology to deliver faster, less expensive, and more user-friendly lending experiences than traditional banks.

What lenders need to succeed

To stay competitive and continue capturing market share in today’s lending environment, traditional financial institutions must invest heavily in technological infrastructure. Technology solutions that were once deemed “nice to have” are now “must haves.” Incorporating the proper tools and processes can help lenders achieve significant rewards, from quicker, more efficient operations to maintaining ongoing portfolio health. Today’s lenders need:

Flexible, scalable API-first infrastructure

An API-first infrastructure offers commercial lenders seamless integration, flexibility, and scalability. This approach modernizes loan processing and management by automating data collection, enabling real-time decisions, providing customization, and supporting scale in high-volume periods.

Analytics insights

AI and machine learning-based insights are helping financial institutions transform their businesses, make better decisions, and increase profits. By analyzing consumer data, lenders can now identify new patterns and use these insights to offer personalized experiences that improve customer retention.

Seamless workflows

As transaction volumes decline, lenders must accelerate loan processing. Automation helps by streamlining fragmented workflows, reducing manual data entry and errors, and speeding up decision-making, which frees up staff for more higher-value work.

Deep visibility

Having deep visibility into every stage of the loan lifecycle helps lenders make more informed decisions. This ability allows them to price loans correctly and serve the right borrowers, which increases profitability and reduces risk.

Straight-through processing (STP)

Integrated solutions that enable straight-through processing (STP) help lenders maximize the success of their lending process. By sharing data across tasks — such as business development and credit memo preparation — lenders can manage opportunities more efficiently.

Solutions you can bank on for efficient, streamlined lending operations

Equip your team with the right tools to navigate market pressures, meet client expectations, and drive growth.

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eSignature →
Digital transformation begins with deploying a simple, scalable solution that provides intuitive and compliant document eSignature capabilities across the lending lifecycle in every asset class. With the optimal solution, lenders can deliver omni-channel signing experiences that align with customer preferences and enable secure, frictionless signing experiences on all digital device types while reducing issues and errors.
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Financial analysis and credit risk management →
A powerful commercial lending software solution helps financial institutions increase profits and grow top line revenue by achieving straight-through-processing across every step of the commercial loan lifecycle. The right solution will accelerate new business development and client retention efforts by increasing efficiencies in data analysis, workflow process and robust data integration; speed credit memo preparation, covenant tracking, and in-depth reporting; and improve profitability in pricing practices, risk-rating and underwriting. 
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eAsset management solution →
Financial institutions need more than just a secure eVault; they must be able to create and manage authentic, original digital contracts and convert assets from electronic format to legally compliant and enforceable electronic assets (eAssets). The right eAsset management platform should include tamper-sealing, encryption, and end-to-end audit trails, enabling lenders to track every action on a loan as a digital chain of custody and evidence. The solution should also encompass the creation of the eAsset to the secondary market, streamlining the entire process and cutting days off of an otherwise paper-based, manual process.
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Lien management solution →
Regardless of market conditions, lien perfection is essential to maintaining overall portfolio health, reducing risk, and protecting the ability to collect in default situations. A lien management solution can help commercial lenders to remediate issues, manage portfolio risk, maintain lien perfection, and keep their focus on core business priorities.
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Compliance analytics →
To minimize fair lending risk, lenders need an easy-to-use, robust solution that analyzes, verifies, and documents their compliance practices with all fair lending regulations. The right solution will enable completion of a regression and comparative file review, an industry-standard practice that helps assess whether there is a statistically significant pattern of protected class borrowers receiving different pricing or approval decisions than non-protected class borrowers.
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SBA lending processing →
Commercial lenders can streamline their SBA lending processes by deploying a SaaS that securely stores and backs up information online and within a secure data center, providing instant access to files from any location. This type of solution enables financial institutions to lower maintenance fees, avoid server issues, eliminate hardware costs, respond faster to clients, strengthen compliance, and achieve greater efficiency with the ability to manage any loan volume.
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Compliance expertise and document generation →
Lenders should never wonder if the contents of their documents will pass the compliance test. By deploying the right solution, they can achieve enterprise-wide document compliance certainty and dynamically generate documents across asset classes. A highly configurable document generation solution and loan processing system will provide lenders with access to a wide range of features that can be activated when needed.

Conclusion

As markets continue to fluctuate, compliance regulations change, and cost pressures rise, commercial lenders must embrace solutions that help them save time, reduce risk, scale back error-prone manual tasks, improve operational efficiencies, and meet growing borrower demands. To position for success in such a competitive, unstable environment, financial institutions need a proven partner with the expertise to help navigate challenges from every angle.

Combining deep domain knowledge with advanced technology, Wolters Kluwer offers a full breadth of solutions specifically designed to help commercial lenders thrive — resulting in a stronger commercial lending portfolio, streamlined compliant lending processes, and accelerated success.

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The need for technology in commercial lending

Commercial lenders face mounting pressures from shifting regulations, market volatility, and rising client expectations. This resource explores how the right technology can help institutions reduce risk, streamline compliance, and capture growth opportunities. Download the eBook to learn how Wolters Kluwer supports lenders to thrive in today’s complex landscape.
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