1. Technology is changing how borrowers do business
A survey of lending professionals and IT experts
August 2018
Sponsored by:

2. Executive Summary
This research finds that the consumer loan market has changed, and as the market changes new types of lenders are positioned to capture market share. Industry professionals indicate that more than 8 out of 10 borrowers prefer an online loan process. Those same online loan processes are faster than, and taking business from traditional lenders.
72% said getting new technology to market fast
is key to combating competitors. Online loan technology needs to be fast, provide user accessibility and supply secure, quality data. Online loan solutions need to be easy to use and adapt for loan professionals. Lenders with flexible and quick-to-deploy technology will be better positioned for ensuing competition.
More than 9 out of 10 of those surveyed indicated online banks are threatening brick and mortar lenders today. These traditional lenders are under siege from both fintech and technology juggernauts entering the market. This evolving market is further threatened with possible upheavals from the political arena.

3. Key Findings Consumer loan market has changed
• 81% share that borrowers prefer online loan solutions
• 87% indicate online loan processes are faster than traditional processes
Traditional lenders are under attack
• 85% state online loan solutions are taking business from traditional lenders
• 93% reveal online banks pose serious threat to brick and mortar banks
• 81% indicate digital and technology companies are better positioned for consumer loan growth
Time to market is key
• 72% indicate time to market critical for new technology

4. Detailed findings

5. 81% share that borrowers prefer online loan solutions 9% NO 19%
In your opinion, do most borrowers prefer an online loan process over a traditional paper loan process? 9%
81%
share that borrowers prefer online loan solutions
NO 19%
YES 81%

6. In your experience, does an online loan process typically result in faster loan processing than the traditional paper process?
87%
indicated online loan processes are faster than traditional processes
NO 13%
YES 87%

7. In your experience, are companies with online loan process technology (i.e. Rocket Mortgage) attracting business away from traditional lenders?
85%
state online loan solutions are taking business from traditional lenders
NO 15%
YES 85%

8. In your experience, which companies pose a legitimate threat in the consumer loan market?
Rocket Loans
(Quickens)
Amazon
Lending Club
Loan Depot
Better Mortgage
SoFi
No company posts
a threat to the
current market
93%
reveal online banks post a serious threat to brick and mortar banks

9. In your opinion, which of the following types of companies have the largest advantage for growing their consumer loan market share?
81%
indicate digital and technology companies are better positioned for consumer loan growth
Traditional financial services companies adopting new technologies (Goldman Sach’s Marcus, Bank of America’s Erica, etc.)
Digital/fintech companies (SoFi, Lending Club, Better Mortgage, etc.)
19%
56%
25%
Tech behemoths (Google, Amazon, etc.)

10. Over the next 12 months, what are the top lending business challenges your company is concerned about?
Reducing costs, attracting new borrowers top challenges in market competition
Reducing costs
Attracting
new borrowers
Regulatory
compliance
Retaining
loan officers
Existing loan process
Takes too long
Margin
compression

11. 72% indicate time to market is critical for new technology 28% 72%
Is speed of technology rollout more important than having a customized solution?
72%
indicate time to market is critical for new technology
28%
No, customization with process integration is more important
72%
Yes, getting to market fast is critical

12. For companies offering an online loan solution, which of the following are key capabilities?
Performance
(fast and responsive)
Performance, accessibility and information quality – are critical for online loan solutions
Secure document
upload and sharing
Customer accessibility
from different devices
(computers, tablets, phones, etc.)
Loan process tracking
and notification
Connecting to verified
borrower data
Scalability (supporting
1,000 of users simultaneously)
Automatic compliance
and reporting
Robust integrations to
other lending technology
Access to APIs
for custom integrations

13. Methodology
and participants

14. Goals and methodology Research Goal Methodology Participants
The primary research goal was to understand the current state of consumer loan market and emerging trends. Additionally, the research sought to understand the effects of technology and success of new industry entrants.
Methodology
Loan professionals and IT experts were invited to participate in a survey on consumer loan processes, technology and competition.
The survey was administered electronically and participants were offered a token compensation for their participation.
Participants
A total of 350 participants having consumer loan responsibilities completed the survey. Participants were from the United States and represented various company sizes.

15. Companies represented
Company size
More than 10,000 9%
5,000 – 10,000
21%
10%
23%
1, ,000
37%
,000

16. Companies represented
Participant responsibilities? 6%
I have infrastructure or software responsibilities supporting loan processes
I have oversight responsibilities for consumer loan processes
14%
80%
I have direct involvement with consumer loan process

17. Companies represented
Role
Front line professional
Or admin (business) 1%
Front line professional
Or admin (IT/technology) 5% 8%
Team Manager
(IT/technology)
35%
Executive
(Business)
23%
Team Manager
(Business)
28%
Executive
(IT/technology)

18. For more information About Dimensional Research
Dimensional Research provides practical marketing research to help technology companies make smarter business decisions. Our researchers are experts in technology and understand how corporate IT organizations operate. Our qualitative research services deliver a clear understanding of customer and market dynamics.
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