Loan Servicing Software Market Size, Share, and Industry Analysis, By Component (Solutions and Services), By Deployment Mode (On-Premises and Cloud), By Enterprise Type (Large Enterprises and SMEs), By End-Users (Banks, Credit Unions, Mortgage Lenders and Brokers, and Others (Loan Servicing Companies)), and Regional Forecast, 2024-2032

Loan servicing software is intended to help lenders increase revenue, enhance customer satisfaction, simplify portfolio management, and reduce operating expenses. This enables mortgage originators, banks, and credit unions to perform timely and accurate data analysis relating to the setting of prices and examining prospective clients' credit profiles.

The growing need for automation and data analytics is driving the growth of this market. Moreover, the market expansion is expected to be driven by the increasing demand for compliance with multiple regulatory standards from banks and finance institutions. According to industry experts, in 2023, 63% of the participants plan to implement technology solutions such as automation and data analytics as a priority to increase loan servicing competitiveness. The growth of this market is hindered by concerns about data security and confidentiality. In addition, a major trend in the loan servicing software market is the increasing integration of self-service in mobile apps for borrowers.

The COVID-19 pandemic has had a significant impact on the growth of the global loan servicing software market. This was due to a rise in unemployment and job losses caused by the pandemic outbreak, which led to a decrease in the demand for housing, mortgages, and personal loans. Shutdowns during the COVID-19 pandemic forced end-users to collect loans physically, impacting the growth of the global market.

Impact of Generative AI on Loan Servicing Software Market:

By providing flexibility and personalization, generative AI can enhance the experience of servicing a loan. The AI can make personalized recommendations and offer tailored advice on EMI payments, helping borrowers to cope with unexpected financial difficulties, by analyzing customer data and interactions. A Fannie Mae Mortgage Lender Sentiment Survey in 2024 found that 73% of lenders observed Generative AI's most valued application to be “enhancing operational efficiency” and rated customizing mortgage loan offerings and compliance review as the most engaging use cases.

In loan servicing software, gen AI gains traction due to various drivers which make it an essential tool for better portfolio optimization, decision making, and enhanced operational efficiency within the finance sector. The drivers such as alternative data sources, scalability, personalization, and others are helping this technology gain traction in the market.

Key Insights:

The report covers the following key insights:

• Micro Macro Economic Indicators

• Drivers, Restraints, Trends, and Opportunities        

• Business Strategies Adopted by Key Players

• Impact of Generative AI on the Loan Servicing Software Market

Segmentation:

Analysis by End-User:

Based on end-user, the market is segmented into banks, credit unions, mortgage lenders and brokers, and others. In 2023, the segment of mortgage lenders and brokers reported the largest market share owing to unique lending approval rules and risk analysis algorithms.

Regional Analysis:

The loan servicing software market is divided into five regions: North America, Europe, Asia Pacific, the Middle East and Africa, and South America.

North America holds the maximum market share in the loan servicing software market. The market expansion is driven due to the increasing banking sector and growing fintech start-up culture, the rise in the adoption of loan servicing software across several industries, and the growing demand for cost-effective solutions and services. In addition, the region benefited from an increased focus on the introduction of loan servicing software solutions and services. Furthermore, in the U.S., personal and home loans are increasing, and customers are demanding a robust loan settlement process.

Distribution of Loan Servicing Software, By Region

• North America – 35%


• South America – 8%


• Europe – 25%


• Middle East and Africa – 12%


• Asia Pacific – 20%

Key Players:

The report provides the profiles of key players such as Applied Business Software, Inc., Neofin (SECURITY), Bryt Software LLC, C-Loans, Inc., Emphasys Software, FICS, Fiserv, Inc., Shaw Systems Associates, LLC, GOLDPoint Systems, Inc., Grants Management System (GMS), and TurnKey Lender.

Key Industry Developments:

• In March 2024, Bain Capital Tech Opportunities, a worldwide software investor, announced that it agreed to invest in Finova, a player in servicing software and savings and mortgage origination, and to acquire this software business. Bain Capital intends to offer existing and prospective customers, a wide range of products through the combination of these two investments while continuing its investment in both platforms.


• In February 2024, Sagent, a fintech-software-backed company upgrading mortgage servicing for lenders and banks, launched the Dara, a mortgage software platform. The move was intended at combining all data and user experiences for homeowners and servicers throughout the servicing lifecycle.