US-based LoanPro has announced its equity investment in TrueNorth , to enable further innovation in lending. The financing solidifies the pre-existing partnership between the two companies, therefore supporting the development of products and delivering value to their customers in the financial services industry.

According to The Financial Brand’s recent survey, 75% of financial institutions plan to increase their innovation spending over the next year. LoanPro’s investment in TrueNorth represents a response to the need for adaptable solutions in the financial sector. Along with TrueNorth’s expertise and approach, LoanPro works towards expanding innovation, while providing customers with new financial products and services through their lending platform.

LoanPro and TrueNorth first partnered in April 2021 to enable lenders through automation and data visibility. The collaboration offered financial institutions a path to implementing LoanPro’s lending platform using TrueNorth’s software development process and engineers. At the time of the partnership, LoanPro’s platform was preferred by over 600 loan providers, including Best Egg, Access Financial, Jackson Hewitt, Medallion Bank, and Fundbox.

TrueNorth’s development process has been created to introduce products to the market in approximately three to six months , and this execution has led to 120 digital transformations and 45 original enterprises built from scratch. Back in March 2023, TrueNorth also partnered with UK-based security and transaction monitoring solution provider Sumsub to aid banks in expanding and digitalising their services. Both companies focused on providing banks, fintech platforms, neobanks, financial institutions, and payment providers globally with a suite of digital solutions, therefore increasing the development process of organisations.

Innovation in lending Financial institutions face a difficult landscape with low growth rates, rising costs, and increasing regulation, however, lending represents a vital part in increasing banks’ revenue and expand development. As consumer interest improves market growth, the online lending market is predicted to register a CAGR of over 11% between 2020 and 2025, though traditional banks have already been impacted by this. Business Insider’s Intelligence’s Online Mortgage Lending  report shows that, in 2011, 50% of the mortgage market has been dominated by the top five US banks, but, by 2020, their share has dropped to 21%, as for the rise of online lenders.

Financial institutions move towards innovation through the advent of platforms and APIs, which provide access to the expertise they need to remain viable against non-traditional methods of financing. APIs enable third-party innovations to merge in a single platform in a marketplace ecosystem, therefore allowing financial institutions to include products and services that allow them to compete in lending. Moreover, APIs simplify data transfers between connected financial bodies and platform contributors, enabling transparency on how current lending products are received by the customers, but also recognise potential opportunities.

Ecosystems’ open nature allows financial institutions to implement products that offer improved capabilities. Financial bodies can digitalise end-to-end lending processes with the help of platform ecosystems, which offer products required for streamlining workflows and automating tasks. However, institutions can improve back-office functionality and facilitate workflows, therefore reducing turnaround times and costs affiliated with loan processing.

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