Aite Matrix: Transforming Consumer

Lending Through Loan Origination Systems

AUGUST 2020

Leslie Parrish
Francisco Alvarez-Evangelista

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Aite Matrix: Transforming Consumer Lending Through Loan Origination Systems AUGUST 2020

TABLE OF CONTENTS
IMPACT POINTS .............................................................................................................................................. 5
INTRODUCTION .............................................................................................................................................. 6
METHODOLOGY ........................................................................................................................................ 6
THE MARKET ................................................................................................................................................... 8
MARKET TRENDS ....................................................................................................................................... 8
DRIVERS FOR AND AGAINST ADOPTION ................................................................................................. 11
FUNCTIONALITY ...................................................................................................................................... 13
KEY MARKET STATISTICS ............................................................................................................................... 17
ANNUAL REVENUE ESTIMATES ANALYSIS ............................................................................................... 17
PROFITABILITY ANALYSIS ........................................................................................................................ 17
GROWTH RATE ANALYSIS ....................................................................................................................... 18
R&D INVESTMENT ANALYSIS .................................................................................................................. 19
CLIENT BREAKDOWN BY TYPE ................................................................................................................. 19
CLIENT BREAKDOWN BY SIZE .................................................................................................................. 20
CLIENT BREAKDOWN BY REGION ............................................................................................................ 21
CLIENT RETENTION AND NEW CUSTOMERS ........................................................................................... 21
DEPLOYMENT OPTIONS ANALYSIS .......................................................................................................... 22
LEADING IMPLEMENTATION FIRMS........................................................................................................ 23
VENDOR COMPARISONS ............................................................................................................................... 24
AITE MATRIX EVALUATION ........................................................................................................................... 33
THE AITE MATRIX COMPONENTS ANALYSIS ........................................................................................... 33
THE AITE MATRIX RECOGNITION ............................................................................................................ 34
OTHER RECOGNITIONS ........................................................................................................................... 36
VENDOR PROFILES ........................................................................................................................................ 37
ALCHEMY ................................................................................................................................................ 37
ARGO ....................................................................................................................................................... 40
AXE FINANCE ........................................................................................................................................... 43
BAKER HILL .............................................................................................................................................. 46
COMARCH ............................................................................................................................................... 49
FICO ....................................................................................................................................................... 52
FINASTRA ................................................................................................................................................ 55
FISERV ..................................................................................................................................................... 58
KULIZA ..................................................................................................................................................... 61
NCINO ..................................................................................................................................................... 64
NUCLEUS SOFTWARE .............................................................................................................................. 67
ORACLE ................................................................................................................................................... 71
ORIGENCE (CU DIRECT) ........................................................................................................................... 73
Q2 ....................................................................................................................................................... 77

© 2020 Aite Group LLC. All rights reserved. Reproduction of this report by any means is strictly prohibited.
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Aite Matrix: Transforming Consumer Lending Through Loan Origination Systems AUGUST 2020

TURNKEY LENDER.................................................................................................................................... 80
WIPRO GALLAGHER SOLUTIONS ............................................................................................................. 83
CONCLUSION ................................................................................................................................................ 87
APPENDIX I .................................................................................................................................................... 88
AITE MATRIX COMPONENTS ................................................................................................................... 88
AITE MATRIX ........................................................................................................................................... 90
RELATED AITE GROUP RESEARCH ................................................................................................................. 93
ABOUT AITE GROUP...................................................................................................................................... 94
AUTHOR INFORMATION ......................................................................................................................... 94
CONTACT ................................................................................................................................................. 94

LIST OF FIGURES
FIGURE 1: FACTORS FOR AND AGAINST ADOPTION ..................................................................................... 11
FIGURE 2: KEY FUNCTIONALITY TRENDS ....................................................................................................... 14
FIGURE 3: DISTRIBUTION OF ANNUAL REVENUE BY RLOS VENDOR ............................................................ 17
FIGURE 4: VENDOR PROFITABILITY ............................................................................................................... 18
FIGURE 5: VENDOR GROWTH RATE .............................................................................................................. 18
FIGURE 6: PERCENTAGE OF REVENUE INVESTED IN R&D ............................................................................. 19
FIGURE 7: CLIENT BREAKDOWN BY TYPE...................................................................................................... 20
FIGURE 8: CLIENT BREAKDOWN BY SIZE ....................................................................................................... 20
FIGURE 9: CLIENT BREAKDOWN BY REGION ................................................................................................. 21
FIGURE 10: CLIENT RETENTION RATE ........................................................................................................... 22
FIGURE 11: DEPLOYMENT OPTIONS ............................................................................................................. 23
FIGURE 12: AITE MATRIX COMPONENTS ANALYSIS BY HEAT MAP .............................................................. 33
FIGURE 13: RLOS AITE MATRIX ..................................................................................................................... 35
FIGURE 14: AITE MATRIX METHODOLOGY ................................................................................................... 88
FIGURE 15: AITE MATRIX KEY COMPONENTS ............................................................................................... 89
FIGURE 16: SAMPLE ASSESSMENT VIA HEAT MAP REPRESENTATION ......................................................... 90
FIGURE 17: SAMPLE AITE MATRIX ................................................................................................................ 91

LIST OF TABLES
TABLE A: THE MARKET .................................................................................................................................... 8
TABLE B: RLOS IMPLEMENTATION PARTNERS .............................................................................................. 23
TABLE C: BASIC VENDOR AND PRODUCT INFORMATION ............................................................................. 24
TABLE D: CLIENT SERVICE SUPPORT (INCLUDED WITH NO ADDITIONAL FEE).............................................. 25
TABLE E: CLIENT TRAINING AND ENGAGEMENT .......................................................................................... 26
TABLE F: PRODUCT DEPLOYMENT OPTIONS................................................................................................. 27
TABLE G: TYPES OF CONSUMER LOANS SUPPORTED ................................................................................... 29
TABLE H: DISTRIBUTION OF RLOS CUSTOMER BASE BY FI TYPE ................................................................... 30

© 2020 Aite Group LLC. All rights reserved. Reproduction of this report by any means is strictly prohibited.
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101 Arch Street, Suite 501, Boston, MA 02110 • Tel +1.617.338.6050 • Fax +1.617.338.6078 • info@aitegroup.com • www.aitegroup.com
Aite Matrix: Transforming Consumer Lending Through Loan Origination Systems AUGUST 2020

TABLE I: GEOGRAPHIC DISTRIBUTION OF RLOS CUSTOMERS, BY VENDOR .................................................. 31

TABLE J: KEY STRENGTHS AND CHALLENGES—ALCHEMY ............................................................................ 40
TABLE K: KEY STRENGTHS AND CHALLENGES—ARGO .................................................................................. 43
TABLE L: KEY STRENGTHS AND CHALLENGES—AXE FINANCE ...................................................................... 46
TABLE M: KEY STRENGTHS AND CHALLENGES—BAKER HILL ........................................................................ 49
TABLE N: KEY STRENGTHS AND CHALLENGES—COMARCH .......................................................................... 52
TABLE O: KEY STRENGTHS AND CHALLENGES—FICO ................................................................................... 55
TABLE P: KEY STRENGTHS AND CHALLENGES—FINASTRA............................................................................ 58
TABLE Q: KEY STRENGTHS AND CHALLENGES—FISERV ................................................................................ 61
TABLE R: KEY STRENGTHS AND CHALLENGES—KULIZA ................................................................................ 64
TABLE S: KEY STRENGTHS AND CHALLENGES—NCINO ................................................................................. 67
TABLE T: KEY STRENGTHS AND CHALLENGES—NUCLEUS SOFTWARE ......................................................... 70
TABLE U: KEY STRENGTHS AND CHALLENGES—ORACLE .............................................................................. 73
TABLE V: KEY STRENGTHS AND CHALLENGES—ORIGENCE .......................................................................... 77
TABLE W: KEY STRENGTHS AND CHALLENGES—Q2 ..................................................................................... 80
TABLE X: KEY STRENGTHS AND CHALLENGES—TURNKEY LENDER ............................................................... 83
TABLE Y: KEY STRENGTHS AND CHALLENGES—WIPRO GALLAGHER SOLUTIONS ........................................ 86

© 2020 Aite Group LLC. All rights reserved. Reproduction of this report by any means is strictly prohibited.
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101 Arch Street, Suite 501, Boston, MA 02110 • Tel +1.617.338.6050 • Fax +1.617.338.6078 • info@aitegroup.com • www.aitegroup.com