2024 Digital Transformation in Commercial Lending — A Critical Shift

The commercial real estate (CRE) market is showing signs of resurgence, and the time is ripe for commercial lenders to embrace digital technology solutions and automation. The lessons learned from the challenges and uncertainties of recent years underscore the urgency of this transformation.

Why Now?

The Imperative for Digital Transformation in Commercial Lending

The CRE market in 2024 is in the process of rebounding from the economic turbulence of previous years. While 2023 was a year of transition, 2024 is expected to be a time of stability and growth. Projections from the Mortgage Bankers Association (MBA) anticipate commercial real estate originations to reach approximately $906 billion in 2024, with multifamily loans contributing significantly to this figure.

The CRE industry is witnessing a notable uptick in the adoption of digital platforms for automating loan document generation. This shift is driven by the desire to streamline the closing process, expand lending operations, and capitalize on areas experiencing robust growth.

2024 Digital Transformation Impact on Commercial Lending’s Competitive Landscape

While these developments are promising, they also signal a changing competitive landscape. Traditional financial institutions once dominated the market, but the past few years have seen fintech companies and smaller digital competitors redefine the industry. These new players offer innovative technology, faster service delivery, and improved customer experiences.

Digital Transformation in Commercial Lending
Why the Resistance?

Get the Top 3 Reasons for ‘Digital Transformation Resistance’ in Commercial Lending

Despite this, some stakeholders in CRE lending still resist digital transformation. To address this hesitancy, it’s essential to understand the reasons behind it.

Digital Transformation in Commercial Lending - Top 3 Reasons for Resistance

Embracing the Digital Era: Borrowers Demand It

The time has come for commercial lenders to fully embrace digital transformation. Borrowers now have a plethora of options for their commercial loans, thanks to the rise of private lenders. Additionally, commercial loan volumes are on the rise, driven by investments in single-family rental properties by both large and small investors. Borrowers demand lower costs, faster closings, and a seamless digital experience.

To thrive in this era, lenders need comprehensive end-to-end digital solutions for all types of commercial lending, from multifamily to single-unit business-purpose loans. These solutions should seamlessly integrate with existing workflows and processes, allowing banks, credit unions, and private lenders to adapt to changing demands without the need for new LOS and banking systems.

Embracing Digital Transformation for Future-Ready Commercial Lending

The projected growth in the commercial and multifamily mortgage markets underscores the importance of digital transformation. It is not just a goal but a necessity, central to achieving success and gaining a competitive edge. The strategic integration of digital tools, from enhancing borrower experiences to streamlining loan documentation, is pivotal. This evolution, marked by solutions like GoDocs, is vital for lenders to adapt, innovate, and lead in a digitally driven market.

Seizing the Moment
Why Implementing Technology Now is Essential for Future Success

In today’s lending market, adjusting to market highs and lows is crucial. While some may be tempted to cut costs and staff, the focus should instead be on identifying the right technologies to implement. Automated closing documents, for instance, offer flexibility during both high and low-demand periods without the need for additional resources.

The timing for implementing new technology is ideal during slower periods, as it prepares lenders for future surges in market activity. It can generate cost savings, accelerate revenue, and open up new geographical areas for lending expansion.

Ultimately, digital transformation is no longer a luxury but a necessity in commercial lending. Lenders who embrace automation and digital technology will be well-prepared to increase loan volumes and revenue, without adding resource costs, ensuring their competitiveness in a rapidly evolving industry.

In 2024, the message is clear: the future of commercial lending is digital, and the time to act is now.

Experience the Future of Commercial Loan Document Automation

Discover GoDocs, the leading SaaS solution powered by the sharpest legal minds in CRE! Schedule a demo today to elevate your lending process and to gain your competitive advantage.

Gain a Competitive Edge with GoDocs

To maintain or gain the competitive edge and strive to be #1 in the lending industry, commercial lenders must continually adapt and evolve. Embracing next-generation technologies and solutions becomes imperative, and that includes harnessing the power of the loan document automation ecosystem offered by GoDocs. By leveraging GoDocs’ cutting-edge automation tools, private lenders can streamline their loan document processes, improve efficiency, reduce errors, reduce resources, and enhance operations to handle any loan type, any loan size, and any loan volume while mitigating risk automatically.

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