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You don’t have to choose between compliance and innovation in lending

Written by Michael Haedrich Senior Product Manager, Finastra
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The lending environment will be very different in 2025 from what it is today.

Cloud technology, consumer expectations, and alternative business models are serving as game-changers for how financial services organizations will operate in the future.

And it’s happening rapidly.

New security and compliance standards at every turn

For financial institutions that rely heavily on their legacy infrastructure, balancing the ever-evolving compliance and security requirements with the constant push for innovation in the lending space can seem daunting.

And with the increased competition from the fintech sector, over 75% of traditional banks fear the rise of new FinTech platforms. Despite this, lenders continue to rely on outdated manual procedures that slow them down and potentially expose their businesses to additional risk.

Leading financial organizations recognize that the cloud is more than a technology, it’s a way to securely and effortlessly shift with the changing tide.

As Dell Technologies’ Chief Technology Officer Arash Ghazanfari puts it, security and compliance should be approached as flexible and reactive, and organizations should create architectures that are built for change.

Strengthening security and compliance can be an enabler for entering new and exciting lending markets. The cloud also offers a huge opportunity to synchronize a financial organization and break down operational and data silos.

Keeping pace and adapting does not have to be an “either/or” proposition. Fortunately, financial organizations can approach this transformation incrementally. They can mix and match solutions based on their organizational needs, maturity, and readiness.

Compliance and the cloud

Not only is the cloud helping to innovate, it’s also becoming an engine to quickly build new lending capabilities. This includes making, achieving, and maintaining a high standard of compliance significantly easier and less expensive.

In fact, leveraging the Artificial Intelligence (AI) benefits of a cloud solution could save banks $70 billion a year.

How? It takes manual error almost completely out of the equation and helps speed up the lending process end-to-end.

AI and Machine Learning (ML) tools are also being used to rapidly identify risks within products and activities. This eliminates manual upkeep and ensures your organization remains secure and compliant.

And with automatic compliance updates, organizations can standardize systems to ensure the entire organization effortlessly keeps up with the most recent regulatory changes.

The right cloud solution also streamlines record-keeping processes, from simplifying form completion and decreasing errors to creating a secure, centralized database that is easy to search.

Leveraging the power of AI and ML also greatly improves the customer experience. From expediting the loan processing to streamlining the origination process, these emerging technologies provide a more seamless digital experience every step of the way.

Proactively protect your data

In addition to customer satisfaction, data security remains top of mind for financial organizations and customers.

Reaping the benefits of the cloud, security and otherwise, does not mean replacing legacy systems. This is not an “either/or” proposition. However, it’s important to consider where you may have risks and vulnerabilities—and how cloud technology can help.

Certain cloud solutions were designed to remove complexities, minimize risk, and effortlessly integrate with your existing infrastructure. This enables your lending organization to have a single platform that scales your digital business in a cost-effective way, drives lending growth strategies, delivers a unified customer experience, and eliminates manual processes, reducing errors and enhancing the security of applications.

In the case of Finastra’s Fusion Originate, for example, lenders can take advantage of the robust protections offered by Microsoft Azure, including a firewall for online applications, digital key management, and multi-factor authentication for all clients, big or small. Plus, utilizing the Azure cloud network provides access to over 90 compliance certifications, the largest portfolio in the industry.

A trusted cloud partnership

With security and compliance measures ever-evolving and no one-size-fits-all approach to cloud solutions for lending, putting strategies in place now will help prepare financial organizations to meet the demands of 2025.

Partnering with Finastra opens the door to effortless innovation in the form of the FusionFabric.cloud marketplace. Whether it’s automating customer onboarding or simplifying the underwriting process, your lending team can plug and play with apps that will enhance your business while keeping your valuable data secure.

Changing how your organization approaches security and compliance doesn’t have to be daunting. It’s all about finding the right balance and solutions that enable your lending organization to innovate and stay ahead of the competition, while also protecting your customers.

Is your financial institution looking for ways to use the cloud to provide a more robust digital lending experience? Download this ebook to walk through a story of a VP of lending and her journey to the choosing cloud-based solutions.

Contact Finastra today to see how our lending solutions can spark innovation and ensure security and compliance at your financial institution.

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