Open Lending Releases Initial Survey Findings on Market Challenges for Auto Lenders, Opportunities to Improve Return on Assets
Research shows financial institutions that use auto lending enablement solutions outperform their peers, uncovers financial resiliency among near-prime borrowers
Using a combination of software applications, data analytics tools and integration capabilities that streamline loan origination, underwriting, and servicing, lending enablement solutions allow financial institutions to efficiently manage and automate their lending processes. Effective lending enablement solutions include features such as loan origination systems (LOS), loan management systems (LMS), credit scoring and risk assessment tools, and automated decision-making capabilities. They can also include integrations with third-party data sources to help lenders make more informed lending decisions.
In a tenuous financial environment, lenders are under pressure to mitigate risk while improving return on assets (ROA), a financial performance ratio that measures a company's profitability by comparing its net income to its total assets. The survey results show that traditional underwriting methods are leaving financial institutions more vulnerable to market volatility, while lending enablement solutions are playing a strong role in improving decisioning speed, increasing ROA and reducing risk exposure. Additionally, findings show that near-prime borrowers are generally more accustomed to financial hardship and are therefore more resilient during economic downturns.
Set to release on
- Institutions that use lending enablement solutions report more success meeting ROA targets.
- Across financial institutions, improving loan-decisioning speed is a top priority for 2023 — but it shouldn’t introduce avoidable risk.
- Lending enablement users are far less likely to report a rise in delinquency rates among borrowers, especially those in the near-prime category.
“In market downturns, it’s critical for financial institutions to have a balanced, resilient portfolio. But that requires reaching borrowers across credit segments with personalized, risk-mitigated loans — and fast,” said
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With Open Lending’s Opportunity Calculator, financial institutions can get customized results on their potential to securely increase near-prime loan originations with the Lenders Protection™ risk management platform. Since its inception in 2000,
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