Demand for Lending Automation Accelerates as Financial Institutions Digitize

“I’ve been doing FinTech for about 20 years now and, you know, everything we’ve been talking about since 20 years ago is kind of all happening now,” Numerated CEO and Co-Founder Dan O’Malley told PYMNTS.

Accelerated by the pandemic, customer demand for digital channels and digital engagement is way up, he said.

Numerated, a FinTech Software-as-a-Service (SaaS) company, has grown by leaps and bounds in the last two years because the traditional financial institutions (FIs) it works with need to digitize how they are lending to the market. Numerated has grown from 55 people at the start of the pandemic to nearly 150 today.

Numerated announced Tuesday (Dec. 7) more growth with the acquisition of Fincura. The deal will add Fincura’s automated spreading and financial analysis to Numerated’s Digital Loan Origination System.

“We’re financially in a really strong spot after all of this growth, and our customers have been asking us to … do what we do to create the Numerated experience magic for more of a lending process,” O’Malley said.

Reducing Work, Improving Accuracy, Providing Faster Decisions

In particular, customers said spreading and financial analysis were causing them pain and asked if Numerated could move into that area and make it better. The company searched for a way to do that and found Fincura.

“In terms of the product we provide, Fincura technology will let us expand the number of loans that Numerated can automate for our customers,” O’Malley said.

The Fincura spreading automation system can handle financial statements and tax returns in any format. Even if the forms are crooked when scanned, the system will work with it.

“And then they give the underwriter a [user interface] that’s incredibly intuitive to engage with,” O’Malley said. “In case the quality’s really bad, and you literally can’t read what’s over here, the underwriter can see that, fix it and still get their spreads done.”

That will now be paired with Numerated’s system. O’Malley said that this technology reduces work for bankers, improves underwriting accuracy and delivers the best customer experiences for businesses by providing faster decisions.

“That’s the power of technology in lending today — you can make it better for everybody than using pieces of paper and using manually created spreadsheets,” O’Malley said. “We had a customer event in June, and one of our customers came up to me and said, ‘Hey, Dan, I have to tell you, you’ve created a monster for us. You’ve shown our customers and our team how great it can be, and now we can’t go back to the old way.’”

Still in the Early Innings of Transformation

Despite the results they can deliver, most banks are not using an origination system today for commercial loans. That means there’s still a market worth billions and billions of dollars for Numerated and other providers to pursue.

“The market is not yet fully realized even for the banks who do have origination software,” O’Malley said. “Most origination software is not actually engaging with the end customer — and that’s where we excel. So, we think the market is huge and getting bigger because we’re in the early innings of this transformation.”

Given the proliferation of new tools and changes to the financial system since the pandemic, O’Malley said the bank-tech sector isn’t limited to making incremental change year after year.

“We have seen such explosive growth in the last two [years], and we continue to see acceleration in the business, even now as we’re substantially bigger,” O’Malley said. “I think the opportunity to build a great bank technology company, a great FinTech, is different today versus at any point in time in the past, which is hugely exciting.”