Modernizing commercial loan servicing

The first step in modernization is to thoroughly evaluate your end-to-end lending value chain, identifying true strengths, differentiators, and gaps against the market. By challenging assumptions about what sets your institution apart, banks can target investments—whether in technical customization, fintech enablement, or GenAI—in areas that drive competitive advantage or efficiency, while using standard solutions for compliance needs.

Modernizing loan servicing goes beyond technology upgrades; it demands a transformation in how banks deliver value, starting with a robust target operating model (TOM) that aligns the business with strategic goals. By reviewing processes end to end and focusing on future-state objectives, banks can streamline operations, break down silos, and integrate innovations like GenAI.

Once a TOM is established, the next step is to select best-of-breed technology that aligns with the TOM vision, enables innovation and GenAI capabilities, and integrates with current systems for scalability. Choosing the right tech stack is crucial—not just for modernizing operations, but for strategically powering transformation and positioning the bank for future growth.

A successful servicing transformation relies on a clear, disciplined approach to data—identifying and rationalizing loan information across the portfolio. By thoroughly examining where data resides, its quality, and its purpose for migration, banks can eliminate inefficiencies, lower costs, address regulatory concerns, and ensure accurate data supports future operations.

Launching a focused initial release—such as piloting a next-gen servicing platform with a specific product line—enables banks to validate new capabilities in a controlled setting while minimizing risk. By establishing clear key performance indicators upfront and closely tracking performance, banks can measure progress, learn critical lessons, and refine future approaches.