As the world looks toward the third year of the COVID-19 pandemic, uncertainties about the economy continue. With the apprehensions that come with a new year, lenders have to plan how to maintain their income without knowing whether the housing market will continue to grow.
All lenders know that 2022 will bring challenges. The strong ones anticipate the problems and rise to overcome them. Here are a few of the trends that lending professionals can expect in the coming year.
Lenders will need to rely on loan management and servicing software
Tech-forward lenders can cope with challenges related to servicing their customers rather than working toward financial goals. With SaaS loan management software from providers like LoanPro, lenders can better manage their customers’ accounts and foster loyalty.
As more buyers turn to cash purchases, lenders need to work closely with the borrowers they already have. Thanks to quality customer service, borrowers stick with lenders they know and trust. Lenders can track their customers and offer them data-backed choices by relying on loan servicing software.
Agility will continue to matter in loan origination and servicing
As more customers struggle to qualify for loans, the customers who do qualify need to know they can take out loans. Lenders with agility can create more customer-focused procedures that attract borrowers with credit-worthy behaviors.
Lender agility matters as pandemic-related issues might increase non-performing loans. Lenders with too many defaulted loans could begin to struggle with capital depletion unless they prepare with agile and resilient finances.
Competition from buy-now-pay-later services
As more consumers are moving away from credit cards, they are turning to the buy-now-pay-later options that let them divide their small purchases into four equal payments. These services deduct each fee from a debit or credit card without charging interest.
Because of the services’ convenience and zero cost, consumers have used them to pay for over $50 billion worth of products. The services do not rely on creditworthiness like credit card companies and traditional lenders, creating a solution that defies the typical consumer lending program.
Worries about the automotive industry
Credit unions are popular choices for consumers who want loans for new and used vehicles. Unfortunately, most consumers have kept their current cars because of the lack of inventory or new options. The chip shortage and supply chain delays have left new car dealerships empty of anything other than used cars.
People who traditionally purchase new cars have been left with their cars as they wait for new vehicles to arrive on their favorite dealership lots. Without cars to buy, credit unions and local banks have lost revenue from the new car loans.
In the post-pandemic world, the economy continues to change. What does all of this mean for lenders? The answer isn’t readily available, but new forms of lending and online trends may just be the key to success.
Lenders need to figure out how to survive when their typical income streams change. Evolving with these changes is the key for successful lenders as they enter 2022.