The role of technology cannot be understated in the secure finance sector. While slower than other industries, technology is still at the core. Digital transformation continues to be one of the top trends in finance – and you can learn more about how to successfully plan and execute one in your business by downloading our eBook.
Even so, many secured finance businesses are relying on on-premise and legacy systems, which are disconnected, inefficient, and could even slow down their growth.
Some common challenges of outdated tech include…
High upfront and maintenance costs
On-premise systems can seem like a good idea for many businesses as they give businesses complete control over their software. In theory, this means they can tailor a solution that perfectly matches their needs. Many businesses also believe that while the upfront costs are high, they will spend less in the long run.
However, in reality, a lot of businesses simply do not have the time and resources to manage an on-premise system effectively. When it comes to costs, on-premise can be much more unpredictable, requiring maintenance, somewhere for the data to be stored, and troubleshooting. Tech debt also becomes a huge expense when new functionality is needed.
Lack of flexibility
It is not just tech debt that is a problem when new functionality is needed. On-premise systems are also much harder to scale, and functionality is regularly bolted on rather than integrated into current systems. This makes it impossible for lenders to be flexible and react to market changes quickly, and can also result in inefficient processes long-term. Having a number of systems to complete different parts of the loan process leads to human error and lower productivity.
Data access and collection
Banks need data in real time. Having a system that can give lenders the data they need, when they need it, is non-negotiable. For many, this is not the case, so lenders are unable to tailor their products, or be proactive in tackling risks.
Data privacy is also a major concern in the secured finance industry. Storing data securely is a must, and this can be almost impossible if lenders do not have the right technology to do it. Spreadsheets for data storage must become a thing of the past.
Cybersecurity
Cyber criminals continue to become more sophisticated by the day. Lenders need to ensure their solutions are watertight. These systems can be vulnerable if they are not kept up to date regularly, both by cybersecurity threats and lack of compliance. Updates also require downtime on an on-premise system, which can put the business out of action for a considerable amount of time.
Customer experience
Lenders that lack good technology will see customers look elsewhere for a better and more streamlined digital journey.
The answer to all these challenges?
Digital transformation. Lenders who use modern technologies that speed up their processes rather than slow them down are the most likely to experience growth, and the least likely to find themselves vulnerable to risks.
Ready to start your digital transformation?
Once you’ve read our eBook to understand the next steps, why not contact our expert sales team so we can support your journey?
Top Trends in Finance 2025
Read part 1: Why your growth strategies should be data-driven
Read part 2: Important regulation changes you need to be aware of
Read part 3: Why you should be paying attention to embedded finance
Read part 4: Technology challenges in lending and how to solve them
Plan ahead in a competitive market!
Read our latest eBook: Shaping the future of secured finance trends with technology 2025