Open Lending Releases Initial Survey Findings on Market Challenges for Auto Lenders, Opportunities to Improve Return on Assets
April 20 2023 - 5:30PM
Business Wire
Research shows financial institutions that use
auto lending enablement solutions outperform their peers, uncovers
financial resiliency among near-prime borrowers
Open Lending Corporation (NASDAQ: LPRO) (“Open Lending” or “the
Company”), an industry trailblazer in lending enablement and risk
analytics solutions for financial institutions, has released
initial findings from a survey of financial institutions across the
U.S. With responses from 95 leaders at credit unions, banks and
captive finance companies of all sizes, the report illuminates the
challenges financial institutions are facing in 2023 and how they
are using lending enablement solutions to compete in the
market.
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 May 11, the full report shows:
- 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 Matt Roe, Chief Revenue Officer at Open
Lending. “Our research found that lenders are really feeling this
pressure right now, and those who aren’t using lending enablement
solutions are falling behind. With risk-based pricing, automated
loan decisioning and default protection, financial institutions can
engage the borrowers they need to stay competitive in this
market.”
Sign up here to receive the full report and attend the Credit
Union Times webinar State of the Industry: Lending Challenges
Facing Credit Unions in 2023 on Thursday, May 11, at 2 p.m. ET.
Matt Roe will share report findings, market insights, and tips to
improve the loan decisioning process while minimizing risk.
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,
Open Lending has insured more than $18.3 billion in auto loans.
About Open Lending
Open Lending (NASDAQ: LPRO) provides loan analytics, risk-based
pricing, risk modeling and default insurance to auto lenders
throughout the United States. For 20 years we have been empowering
financial institutions to create profitable auto loan portfolios
with less risk and more reward. For more information, please visit
www.openlending.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20230420005975/en/
Alison Smith for Open Lending openlending@ink-co.com
Investor Relations Inquiries openlending@icrinc.com
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