Kristin Moyer

Nobody has wanted to talk about lending technology for a long time now.  In fact, I’ve had few discussions about lending with clients since 2Q08.  While the number of client discussions I’ve had during 1H09 has increased 200% year-over-year (and last year was already at a pretty high level), these discussions have nearly all been focused on payments – not lending.  Over the past 4-5 weeks this has begun to change.

We now have a number of large, global banking clients that are talking to us about lending technology again.  Much of this discussion is around: 1) consolidating redundant commercial lending applications, 2) consolidating and modernizing retail loan origination applications.

Last week one of my clients asked, “Why are banks in a position where they need to consolidate applications?  What caused the redundancy in the first place?”  We see two main reasons: 

• They have acquired redundant applications as part of M&A activity over the past 3-5 years (not just the past 18 months)
• They have separate P&L structures for domestic vs. international and for mortgage vs. retail vs. commercial, with different business units selecting different applications (which turn out to be redundant applications) according to their unique needs.

These discussions are not going to turn into rapid vendor selection processes, and most will probably not be big bang implementations.  However, interest in lending technology is showing signs of life.