The global loan servicing software market is estimated to grow by $2.7 billion over the next four years, according to market research firm Technavio.
The market is estimated to grow at a CAGR of almost 12.01% from 2024 to 2028, the firm says in a report.
Demand for efficiency in lending operations is driving market growth, with a trend towards strategic partnerships and acquisitions between market participants.
However, threat from open-source loan servicing software poses a challenge. These solutions, developed by organizations or developer communities, offer cost-effective alternatives to commercial software. Notable open-source options include Apache Fineract, Online Lending Software, Trakker, and Turnkey-Lender, Technavio says.
While these solutions are attractive due to their affordability, they come with limitations, such as limited functionality and the absence of advanced features. Customization and additional functions require extra costs. Furthermore, technical support is the responsibility of the user in case of errors.
The loan servicing software market is highly competitive, leading vendors to form strategic partnerships and acquisitions with various market participants, the firm says. These collaborations enable vendors to expand their product offerings, reach new geographies, and access technological expertise.
For instance, in April, PrivoCorp, a prominent mortgage processing outsourcing services provider, partnered with Calyx Software, a pioneer in loan origination platforms. This partnership combines Calyx’s advanced LOS technology with PrivoCorp’s processing services, benefiting Calyx clients.
Similarly, in May, Paydit, a collections automation platform, and LoanPro, an API-first lending and credit platform, announced a strategic partnership. This collaboration enhances collections and recovery rates for lenders, offering a seamless solution for managing past-due accounts and automating collections.
These partnerships and acquisitions are crucial factors driving growth in the loan servicing software market, Technavio says in its report.
Photo: Dollar Gill
