Carleton released findings from its inaugural Platform Migration and Modernization Survey, which found that while most lenders consider modernization a priority, many continue to rely on legacy systems and have yet to complete the migration process.
Carleton, which provides loan calculation and compliance technology for lenders, conducted the survey in May. The survey gathered responses from 250 lending professionals across credit unions, banks, auto finance companies and fintechs. The survey found that 87% of respondents are engaged in platform migration efforts, but only 8.7% said they have fully completed the process. Almost three-quarters of respondents described their current environment as primarily legacy, while 10.6% reported operating on a fully cloud-based platform.
More than three-quarters of respondents said the need to modernize their lending platforms is either extremely or very urgent. However, 23% said they are still considering migration without a defined timeline.
Limited internal resources and cost constraints were the most commonly cited challenges to modernization, identified by 31.6% and 28.6% of respondents, respectively. Another 15.6% noted concerns about disruption during a system transition.
The survey also found that many organizations devote significant resources to maintaining existing systems. One-third of respondents said they spend 80% to 100% of their platform resources on maintenance, while another 40% spend between 60% and 80%.
Compliance risk was the most frequently reported operational challenge, identified by 35.4% of respondents. Calculation accuracy was named by 23.2% as the area of their platform most in need of modernization.
Almost one-third of respondents said it takes six months or longer to implement a new product or regulatory change, while 12.7% reported implementation timelines exceeding one year. Additionally, 30.2% said a security incident would be the most likely event to trigger modernization efforts.
The survey found that almost two-thirds of respondents identified hands-on migration assistance as the most valuable resource for modernizing their lending platforms.
"The survey findings echo what Carleton hears in sales and client conversations every day," Tim Yalich, vice president of business development at Carleton, said. "Institutions still running on legacy systems, some more than two decades behind their industry peers on technology, are not simply managing aging infrastructure. They are limiting their ability to compete, to grow into new states or asset classes, to integrate with modern fraud prevention tools, and to access the AI-enabled capabilities that are rapidly reshaping how lending decisions are made and monitored."
Joyce Moed can be reached at joyce.moed@arc-network.com.
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