Global Loan Origination Software Market Size, Share & Industry Trends Analysis Report By Component (Solution, and Service), By Deployment Mode (On-premise, and Cloud), By End-User, By Regional Outlook and Forecast, 2023 - 2030

Market Report Description

The Global Loan Origination Software Market size is expected to reach $10.0 billion by 2030, rising at a market growth of 10.5% CAGR during the forecast period.

Banks use loan origination software to automate and streamline the loan application and approval process. Therefore, the banks segment is poised to acquire more than 43% share of the market by 2030. This helps reduce manual tasks, lowers operational costs, and accelerates the time to approve and disburse loans. Banks often require customized LOS solutions to meet their lending criteria and processes. Loan origination software can be tailored to align with the bank's lending policies and business objectives. The bank segment is a significant player in the loan origination software market and plays a crucial role in the lending industry. Banks use loan origination software (LOS) to streamline and automate the process of originating, underwriting, and managing loans.

The major strategies followed by the market participants are Partnerships as the key developmental strategy in order to keep pace with the changing demands of end users. In November, 2022, LendingPad Corp. formed a partnership with Shape Software, Inc to provide comprehensive LOS and CRM solutions for larger broker clients. Additionally, In September, 2023, Floify LLC teamed up with Wolters Kluwer N.V. to utilize the features offered by Wolters Kluwer's original product suite.

KBV Cardinal Matrix - Market Competition Analysis

Based on the Analysis presented in the KBV Cardinal matrix; ICE Mortgage Technology, Inc. is the forerunner in the Market. In July, 2023, ICE Mortgage Technology, Inc. partnered with Electronic Appraisal Solutions, Inc. Through this partnership, mortgage industry stakeholders would be provided with efficient access to every single collateral valuation-related product and service. Companies such as Software Advice, Inc., Floify LLC, LendingPad Corp. are some of the key innovators in the Market.

Market Growth Factors

Growing Adoption of Blockchain, AI, and Machine Learning Technologies

The increased adoption of AI, ML, and blockchain technology significantly impacts the loan origination software market, transforming how lenders evaluate, process, and manage loans. These technological advances have increased efficiency, precision, and security, propelling the market growth for loan origination software. AI and ML optimize risk assessment, allowing lenders to make informed decisions, while blockchain ensures the integrity and security of sensitive borrower information. This accelerates the lending cycle and reduces the probability of errors, fraud, and compliance violations. Therefore, the growing use of AI, ML, and blockchain technology, which encourages efficiency, accuracy, and security across the lending process, is fueling the growth of the loan origination software market.

Enhanced Customer Experience

In a financial landscape that is undergoing rapid change, consumers demand streamlined, convenient, and customized experiences throughout the entire borrowing journey. Incorporating automation and AI-driven tools into loan origination processes has significantly accelerated the application processing and risk assessment. As a result, consumers experience quicker approvals, fast disbursals, and lower error rates, boosting their confidence in the lending institution. These platforms transform borrowing into a positive, effective, and secure experience by offering ease, personalization, efficiency, and security. As customer expectations continue to evolve, the market for loan origination software must remain dynamic, incorporating innovative technologies to exceed these expectations and propel the market forward consistently.

Market Restraining Factors

Issues About Compliance and Data Security

Nowadays, in the digital landscape, where financial transactions and sensitive information are predominantly processed electronically, assuring the security and confidentiality of customer data is of the utmost importance. Nonetheless, loan origination involves acquiring, storing, and transmitting susceptible data, such as personal and financial information. In addition, customers are worried about exposing their personal information online due to increased user awareness of data security. This prudence extends to loan applications and financial transactions, causing prospective borrowers to seek out lenders that prioritize data security. Concerns about data security and compliance have substantially slowed the expansion of the loan origination software market.

Deployment Mode Outlook

By deployment mode, the market is categorized into on-premise and cloud. The cloud segment covered a considerable revenue share in the market in 2022. The adoption of cloud technology will likely fuel the expansion of the loan origination software market by providing financial institutions with the flexibility, cost-efficiency, and advanced capabilities needed to streamline their loan origination processes and stay competitive in a rapidly evolving market. Cloud-based loan origination software can easily scale up or down based on the needs of financial institutions. This flexibility allows banks and lending organizations to handle fluctuations in loan origination volume without significant infrastructure investments. Cloud-based loan origination software can enhance the customer experience by offering online application forms, document uploads, and real-time status updates.

Component Outlook

On the basis of component, the market is bifurcated into solution and service. In 2022, the solution segment dominated the market with maximum revenue share. The growth of the solution segment in the LOS market is directly tied to the evolving needs of lenders, regulatory requirements, and technological advancements. As financial institutions seek to provide faster, more efficient, and compliant loan origination processes, the demand for comprehensive and adaptable LOS solutions will continue to grow. The loan origination software market offers a range of solutions tailored to the needs of various financial institutions, including banks, credit unions, mortgage lenders, and online lending platforms. These solutions can vary regarding features, scalability, and deployment options (on-premises or cloud-based). Loan origination software solutions come with a wide array of features and functionalities.

End-User Outlook

Based on end-user, the market is classified into banks, credit unions, mortgage lenders & brokers, NBFCs, and others. The credit unions segment projected a prominent revenue share in the market in 2022. Loan origination software (LOS) helps credit unions automate and digitize their loan origination processes, reducing manual paperwork and administrative tasks. This automation increases operational efficiency and cost savings, allowing credit unions to allocate resources more effectively. Members of credit unions expect convenient and fast loan approval processes. LOS solutions enable credit unions to offer quicker loan decisions and a seamless application experience, enhancing member satisfaction and retention. Adopting loan origination software among credit unions may vary depending on their size, budget, and strategic priorities.

Loan Origination Software Market Report Coverage

Report Attribute	Details
Market size value in 2022	USD 4.6 Billion
Market size forecast in 2030	USD 10 Billion
Base Year	2022
Historical Period	2019 to 2021
Forecast Period	2023 to 2030
Revenue Growth Rate	CAGR of 10.5% from 2023 to 2030
Number of Pages	247
Number of Table	353
Report coverage	Market Trends, Revenue Estimation and Forecast, Segmentation Analysis, Regional and Country Breakdown, Competitive Landscape, Companies Strategic Developments, Company Profiling
Segments covered	Component, Deployment Mode, End User, Region
Country scope	US, Canada, Mexico, Germany, UK, France, Russia, Spain, Italy, China, Japan, India, South Korea, Singapore, Malaysia, Brazil, Argentina, UAE, Saudi Arabia, South Africa, Nigeria
Growth Drivers	Growing Adoption of Blockchain, AI, and Machine Learning Technologies Enhanced Customer Experience
Restraints	Issues About Compliance and Data Security

Regional Outlook

Region-wise, the market is analysed across North America, Europe, Asia Pacific, and LAMEA. In 2022, the Asia Pacific region acquired a significant revenue share in the market. This expansion can be ascribed to the surge in small and medium-sized businesses (SMEs) and e-commerce in the region, which has expanded demand for business loans. Online lenders and fintech platforms are filling the need for loan origination software with simplified loan origination procedures. As a result of rising income levels, urbanization, and a developing middle class, the Asia-Pacific region is also associated with some of the fastest-growing economies in the world. As economies expand, so does the demand for mortgage, personal, and commercial loan origination software.

Free Valuable Insights: Global Loan Origination Software Market size to reach USD 10 Billion by 2030

The market research report covers the analysis of key stakeholders of the market. Key companies profiled in the report include Finastra Group Holdings Limited (Vista Equity Partners), Software Advice, Inc. (Gartner, Inc.), Floify LLC (Porch Group, Inc.), Bryt Software LCC, LendingPad Corporation, ICE Mortgage Technology, Inc. (Intercontinental Exchange, Inc.), Nelito Systems Pvt. Ltd., LoanPro Software, LLC, TurnKey Lender Inc., and nCino, Inc.

Strategies deployed in the Market

» Partnerships, Collaborations, and Agreements:

• Sep-2023: Floify LLC teamed up with Wolters Kluwer N.V., an information services company, to utilize the features offered by Wolters Kluwer's original product suite. This partnership would offer Floify customers a digital e-closing capability, enabling digital signatures as an alternative to the traditional wet-signing approach.
• Jul-2023: ICE Mortgage Technology, Inc. partnered with Electronic Appraisal Solutions, Inc., also known as Valligent, a company that offers appraisal, compliance solutions, and valuation services to integrate its offerings with Valligent's platform. Through the partnership, mortgage industry stakeholders would be provided with efficient access to every single collateral valuation-related product and service.
• Dec-2022: LendingPad Corp. signed an integration partnership with Mortech, a Zillow Group business, product, and pricing engine. LendingPad's loan origination software users would have the capability to effortlessly access up-to-date and precise mortgage rates from Mortech's product and pricing engine directly through the platform, eliminating the requirement for manual data input. This enhancement would result in time savings for loan officers, as data transfer would be seamless, and it would enhance the locking process by granting access to real-time and historical pricing information within the LendingPad platform, offering greater visibility.
• Nov-2022: LendingPad Corp. formed a partnership with Shape Software, Inc., a customer relationship management (CRM) platform, to provide comprehensive LOS and CRM solutions for larger broker clients. This seamless integration between LendingPad and Shape eliminates the need for manual data entry regarding borrower information and ensures that critical loan data and statuses remain synchronized.
• Sep-2022: LendingPad Corp. came into partnership with Lender Price., a mortgage loan pricing technology provider, to integrate its offerings with Lender Price's portfolio. Through this partnership, loan officers would have the opportunity to consolidate the complex loan origination process. This would enable them to access both product eligibility information and competitive pricing analysis within a single application, all seamlessly integrated through the LendingPad system.
• Sep-2022: LoanPro Software, LLC partnered with Anovaa, a next-generation consumer loan origination platform, to provide end-to-end loan servicing & and loan origination solutions. This partnership would provide users of LoanPro and Anovaa with full command over the entire loan journey, starting from Anovaa's origination solution and extending to LoanPro's capacity to manage loans and enhance collections.
• Mar-2022: ICE Mortgage Technology, Inc. came into an integration partnership with Maxwell Financial Labs, Inc., a mortgage fintech solutions platform for small to midsize lenders, for its Encompass eClose. This solution would be integrated into Maxwell's point-of-sale platform, aimed to make the closing process easier and more efficient for both lenders and borrowers throughout the United States. By adding eClose to Maxwell's platform, the company would be able to give all the Encompass lenders using their system a real digital experience. This would make things work better, speed up the steps, and lower expenses for the lender.
• Mar-2022: ICE Mortgage Technology, Inc. formed a partnership with Roostify, Inc., a leading mortgage technology provider, to provide an extensive digital closing solution that would strengthen Roostify's two-way integration with Encompass. This partnership would enable lenders to offer borrowers an improved lending experience characterized by speed, efficiency, and accuracy.
• Sep-2021: Floify LLC partnered with Unify, a customer relationship management (CRM) and marketing automation software. The partnership would empower loan originators utilizing Floify to automate their mortgage process and unify to oversee their customer database.

» Product Launches and Product Expansions:

• Apr-2021: ICE Mortgage Technology, Inc. launched Encompass eClose, an edge solution that facilitates mortgage loans eClosing workflow. The solution offers several benefits including lowering operational costs, providing a single platform for multiple eClose platforms, reducing the acquisition cycle, etc.
• Feb-2021: Floify LLC revealed that it would be updating to Floify E-Sign, the company's widely used native e-signature solution. This update aims to include support for the Disclosure Desk. The update namely, Floify E-Sign for Disclosure Desk would enable enterprise lenders to smoothly combine their existing loan origination system (LOS) with Floify and the platform's built-in e-signature solution, creating a mobile-friendly point-of-sale (POS) system that would streamline the origination and disclosure process. Floify E-Sign for Disclosure Desk would make getting a loan easier and help lenders make more money by providing useful features.

» Geographical Expansions:

• Nov-2022: TurnKey Lender Inc. has expanded its reach to the United Kingdom. This move would allow the company to provide comprehensive automation, adaptability, AI-driven credit scoring, and top-tier reporting capabilities that would benefit the wider global TurnKey Lender community in the UK.

Scope of the Study

Market Segments Covered in the Report:

By Component

• Solution
• Service

By Deployment Mode

• On-premise
• Cloud

By End-User

• Banks
• NBFCs
• Mortgage Lenders & Brokers
• Credit Unions
• Others

By Geography

• North America
  • US
  • Canada
  • Mexico
  • Rest of North America
• Europe
  • Germany
  • UK
  • France
  • Russia
  • Spain
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Singapore
  • Malaysia
  • Rest of Asia Pacific
• LAMEA
  • Brazil
  • Argentina
  • UAE
  • Saudi Arabia
  • South Africa
  • Nigeria
  • Rest of LAMEA

Key Market Players

List of Companies Profiled in the Report:

• Finastra Group Holdings Limited (Vista Equity Partners)
• Software Advice, Inc. (Gartner, Inc.)
• Floify LLC (Porch Group, Inc.)
• Bryt Software LCC
• LendingPad Corporation
• ICE Mortgage Technology, Inc. (Intercontinental Exchange, Inc.)
• Nelito Systems Pvt. Ltd.
• LoanPro Software, LLC
• TurnKey Lender Inc.
• nCino, Inc