Despite appearing light and fluffy, did you know that cumulus clouds can each weigh approximately 550 tons? That’s about the weight of 100 elephants combined! A cumulus cloud’s weight is distributed across huge numbers of very small water droplets. In a similar way, digital clouds also each carry an enormous and distributed “weight” — made up of data, applications, and complex infrastructure — all working quietly in the background to provide users with a seamless digital experience. In today’s fast-moving, competitive market, community financial institutions (CFIs) need to adopt flexible systems that can quickly adapt to emerging technology capabilities, increased regulatory requirements, and evolving customer needs. Cloud-based lending solutions are one such option that CFIs are increasingly employing. Shifting from traditional, on-premises lending systems to cloud-based platforms can significantly change how an institution’s data is stored, secured, and accessed, among other things.Here are five ways in which cloud-based lending solutions can transform a CFI’s internal operations as well as the customer experience.
- Enhanced accessibility. These days, individual and business borrowers expect a fast, frictionless, personalized lending experience. Cloud lending platforms enable remote loan applications from any device, anywhere, and at any time. Digital platforms and automation can streamline and improve the borrower journey by cutting processing times, providing faster approvals and real-time updates, and allowing faster access to funds. What’s more, by integrating AI, data analytics, and alternative credit data, CFIs can benefit from more accurate decision-making, and offer increased accessibility — including to underserved communities — and hyper-personalized experiences to improve customer satisfaction and loyalty.
- Improved operational efficiencies and cost savings. Traditional lending systems can be slow, prone to human error, and costly due to their reliance on manual processes, outdated systems, and siloed infrastructure. Cloud-based lending platforms can help to streamline an institution’s operations by automating all aspects of the lending lifecycle — from origination and underwriting to compliance checks, servicing, and collections. This can significantly reduce operational and maintenance costs and free up staff for higher-value tasks, or customer- and community-facing work. By consolidating loan portfolios into a single platform, cloud systems eliminate legacy tech, enhance scalability, improve data integration, and enable CFIs to respond agilely and cost-effectively to market changes and customer needs.
- Increased security. Most cloud lending platforms offer robust enterprise-level security and compliance with evolving regulatory standards. With ongoing investment in encryption, access controls, threat management, and continuous updates and maintenance, cloud platforms provide security and compliance at a level often above what CFIs have in their on-site systems. What’s more, many cloud platforms offer built-in disaster recovery, keeping services resilient and reliable, even during disruptions.
- Better risk and compliance management. By employing AI-driven tools, advanced analytics, automated workflows, and integrated lending services, cloud-based lending solutions can help CFIs reduce risk. Access to alternative credit data, fraud detection, and real-time analytics enables faster, more accurate decisions, qualifying more borrowers without increasing risk. Built-in compliance and configurable rules also ensure decisions stay aligned with evolving regulations.
- Enhanced innovation and future-readiness. Finally, cloud-native lending platforms can make it easier for an institution to integrate its systems with specialized loan solution providers and third-party products, such as providers of origination and loan management solutions, credit bureaus, e-signature providers, and customer support solutions. Most cloud platforms also offer the agility to adopt emerging technologies like AI, biometrics, and blockchain more easily. Using microservices architecture and open APIs, CFIs can launch products faster, partner with fintechs more easily, and adapt quickly to market changes without the cost and complexity of maintaining legacy systems.
Cloud-Based Lending in PracticeTexas-based VeraBank modernized its lending and account opening by adopting a cloud-based platform. The move streamlined workflows, reduced manual errors, and cut processing times — offering customers faster access to funds and a smoother experience. With real-time insights and faster ROI, the institution is better equipped to scale, innovate, and stay competitive.Coastal Community Bank in Washington embraced cloud-based data solutions to support its lending and Banking-as-a-Service (BaaS) offering, and meet the rising demands for real-time processing, secure data sharing, and automated compliance. Moving to a unified, cloud-based architecture facilitates seamless, secure data exchange with partners, improves risk oversight, and has helped the CFI to scale rapidly.Cloud-based lending solutions are an important tool for CFIs that want to remain competitive and grow in a digital-first world. These platforms can enhance accessibility and customer experience, improve operational efficiency, and provide cost savings at the same time as strengthening security to build trust and supporting better risk and compliance management. With built-in scalability and flexibility, they can also help future-proof institutions by enabling fast innovation and the agility to adapt in a rapidly evolving digital landscape.
