The consumer lending industry is facing immense pressure to modernize its aging technology infrastructure, with nearly nine in ten respondents engaged in migration efforts. However, a significant share of lending institutions remain anchored to legacy systems that expose them to growing compliance, security, and operational risk. The data paints a picture of an industry in transition, but one where the pace of change remains slow relative to the scale of the operational, compliance, and security risks involved.
The survey reveals a stark reality: while urgency is near-universal, only 8.7% of respondents have fully completed the modernization process. A combined 76.5% rate the need to modernize as extremely or very urgent, yet more than one in five organizations are still only considering migration without a defined timeline.
This gap between awareness and action represents significant exposure for an industry built on precision calculation and regulatory accountability. The barriers to migration are structural, not philosophical, with cost constraints and limited internal resources cited as the primary reasons for delay.
The operational burden of legacy systems compounds the problem, with one-third of respondents spending 80% to 100% of their platform resources on maintenance rather than new development. Organizations carrying that level of overhead have limited internal capacity available to support large-scale modernization initiatives.
Compliance risks are cited as the most common operational challenge, identified by 35.4% of respondents. Calculation accuracy is also a pressing concern, with 23.2% naming it as the area of their platform most in need of modernization.
The industry's reluctance to modernize is driven by caution about operational continuity during a system transition, with disruption concerns cited by 15.6% of respondents.
Notably, only 5.3% of respondents cite confidence in their current system as a reason to delay migration. This suggests that the industry is not avoiding modernization due to a lack of faith in its legacy platforms, but rather due to the perceived costs and complexities of the path forward.
The survey's findings highlight the need for external support and guidance to help organizations navigate the complex process of modernizing their technology infrastructure.
As the industry continues to grapple with the challenges of modernization, it is clear that the stakes are high. The risks of staying still are escalating, and only those who take proactive steps to address these concerns will be able to mitigate them.
The pace of change is slow, but the risks are escalating.
