Financial technology can help banks simplify and streamline the small business lending process. However, many banks aren’t taking advantage of it. According to the 2024 Federal Deposit Insurance Corporation (FDIC) Small Business Lending Survey, 31% of banks are leveraging fintech to streamline small business lending,

Banks and financial institutions can level up their lending experience and reduce bottlenecks by investing in the right software. Lending platforms using the latest technology not only make it easier for banks to originate and process small business loans but also make it easier and more attractive for borrowers.  

Implementing a new lending platform can result in improved efficiency and an increase in customer satisfaction. Here we cover major pain points banks are experiencing and how investing in a lending platform can mitigate some of those issues and provide tangible benefits.  

Challenges Facing Banks in 2025

Banks looking to capture the interest of new borrowers have a lot to contend with right now. Interest rates remain elevated, and inflation persists, affecting the costs of goods across the board. These factors can affect borrower demand and potentially increase the likelihood of default.  

Economic uncertainty and volatility, data breaches, regulatory challenges, and market competition also impact banks, making the lending experience more difficult.  

Banks with outdated systems may spend more time on processing applications and making lending decisions. Lending software can transform the lending experience for banks and borrowers in a number of ways.  

What A New Software Can Do for Your Bank

After implementing sophisticated lending software, banks can immediately notice numerous benefits that all lead to the same result — more time, more money, and fewer errors.  

Faster Processing

Lending platform software can expedite processing times for loan applications. Borrowers typically must provide supporting documentation to get a small business loan. Having an outdated process can lead to delays for borrowers and they face challenges trying to submit the appropriate paperwork.  

Banks with manual review systems can lead to more delays analyzing documentation. Instead of manually reviewing all the details of an application, financial technology and artificial intelligence (AI) can work in tandem to review and process large quantities of data.  

Borrowers can easily upload documents and have a customer portal and dynamic application, making it easier to go through the process. This helps keep borrowers engaged and frees up time and energy for banks to focus on high-level tasks.  

Improved Accuracy

Using a financial technology platform to be your small business lending solution can improve accuracy. Manually reviewing information or inputting data is risky. After all, human error exists. Small mistakes can be major setbacks, costing a substantial amount of both time and money.  

Financial technology can use predictive analytics to better assess creditworthiness and help aid in fraud detection. The lending platform can automate the data collection process, review forms, and detect any errors and inconsistencies. 

Greater Efficiency

Speeding up processing times and improving accuracy leads to one thing: greater efficiency. This helps remove unnecessary roadblocks and boosts productivity. From a business perspective, this can lower operational costs and support your bottom line. It also enables you to make faster decisions and, in turn, support more small businesses because you have a greater bandwidth.  

For example, the lending software can handle the pre-qualification process and automatically deny those who don’t qualify. Those who meet the criteria can get instant validations, so they can move forward in the process.  

From a borrower perspective, having pre-filled forms can expedite the application process and keep them engaged so they make it through completion. Additionally, financial technology makes it simple for borrowers to e-sign documents, get fast funding, and repay the loan.

Ability to Scale

Your bank works with small businesses. But your operations don’t have to stay small. When using the latest innovative technology, you go beyond human capacity and can scale to levels you might not have imagined.  

A lending platform solution removes certain barriers to growth and helps you manage operations efficiently and effectively — without any added overhead. In other words, you don’t need more staff or resources to scale up and distribute more loans. Banks utilizing lending platform software can analyze a massive number of applications at once.  

Manage Higher Loan Volume

A tangible benefit of using a lending platform is the ability to manage a higher loan volume without hitting a snag with performance issues. The financial technology behind the tool helps automate tasks and workflows. AI-driven underwriting allows banks to analyze various risk factors quickly.  

This takes humans out of the equation and uses a range of data points to determine whether a loan should be approved or not. According to the 2024 FDIC Small Business Lending Survey, banks that used automated underwriting reviewed factors such as:

  • Personal and business credit scores 
  • Derogatory items on credit reports 
  • Agreeing to a personal guarantee  
  • Delinquency history 
  • Financial strength  
  • Potential collateral 
  • Debt service coverage  
  • Cash position

All banks and financial institutions stand to benefit from this innovative technology. However, small banks are lagging behind large banks. The FDIC notes that among banks surveyed, 46% of large banks used some form of automated underwriting, while only 9% of small banks did so.  

Implementing the right lending platform can be a great equalizer. If you’re a small bank, you can scale and compete with larger banks with more resources.  

Elevate Customer Experience

Customer experience is everything in business. In a competitive market, it’s important to keep customers engaged and happy. Using a lending platform, customers have access to an easy-to-use application. In some cases, they can submit an application on any type of device, which can help attract borrowers across different generations.  

To reduce friction, applicants can upload documents to their portal. They’re also empowered with information, so they know where they stand in the loan process. This level of transparency helps build trust and relationships between your financial institution and your customers.  

Providing a streamlined digital application elevates the customer experience. Instead of being an arduous task to complete, the process is easy and without many hurdles to jump through.  

Looking Toward the Future

Leveraging financial technology to your advantage can free up resources and reduce costs. Instead of replacing teams, it can empower them to work together on higher-level tasks. Post-implementation, your lending services can grow and scale, creating a seamless and positive experience for borrowers.  

Using a lending platform helps manage the application process from start to finish, making it easier to attract new customers. As an added benefit, AI-driven underwriting can also make lending practices more equitable, helping you reach people who may be underserved in financial services.  

The Biz2X lending platform is one such solution that allows banks to assess an applicant’s financial history, creditworthiness, and alternative data sets and come to a decision without human bias.  

Plus, you can customize the platform to match your branding and credit policies, keeping marketing and compliance happy. These factors combined work together to help your bank or financial institution stay relevant in the digital landscape and continue to grow and scale.