To stay competitive, nonbank lenders need to stay ahead of changing regulatory landscapes, mitigate emerging risks, and monitor shifts in the tech landscape like AI and security management. Let’s dive into three trends we see in our nonbank lending clients helping them stay competitive: co-sourcing, early LMS implementation, and institutional investor requirements.

All firms need to start somewhere when managing loans, and most begin with spreadsheets knowing they’ll eventually transition to a more scalable solution as they grow. But lately, we’ve seen potential clients come to us earlier and earlier in their tenure. These companies recognize the importance of transitioning from spreadsheets to an LMS early on to reduce manual errors, manage risk, and help them scale.

As lending operations grow, the volume of transactions, customer data, and overall complexity increases. Relying on manual processes and spreadsheets to manage a growing portfolio quickly becomes untenable. And, the longer a firm waits to transition to an LMS, the harder it can be to transfer data securely and train employees on new systems and processes.

It’s not just the headaches of late-stage implementation driving the move toward early LMS adoption. Firms like Pershing Ventures, a Venture Capital fund providing venture debt and financing capital to SMEs, see an LMS as key to proactively managing risk.

“You think firstly about credit and market risk, as key business challenges. Less obvious are the operational risks that can turn into a credit or market risk. Spreadsheets are inherently an operational risk,”
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_{shared David Weiss, Pershing Ventures President.}

Pershing implemented Hypercore early not as a reaction to risk, but instead as a preventative measure.