Corporate lending 2025:
Maximize growth by modernizing operations 

Blog, January 9, 2025

Maurya Murphy – Senior Product Director • Product Management

With economic pressures easing, interest rate adjustments, and increased business activity there are fresh opportunities for strategic investments in areas such as corporate digitization and infrastructure. After a couple of turbulent years, the corporate lending market is gaining momentum once again, with industry estimates pointing to a CAGR of 10.65% to reach USD 7.88 trillion by 2030.¹

At the same time, maintaining profitability remains challenging for banks globally, despite the higher interest rate environment. This makes the corporate lending segment, with the high fees it attracts, an enticing proposition for growth and expansion for financial institutions.

Still, corporate lending has its own fundamental challenges. One of the main appeals of the market is its lack of standardization – with lenders willing, and able, to provide terms and conditions specific to a borrower’s unique credit needs.

But this level of flexibility comes at a price, with a strong reliance on paper, manual processes, and a specialist, aging workforce. McKinsey has highlighted the extent of this human capital problem: banks with US-centric loan operations have faced attrition rates of between 20-70% since 2021.²

Exacerbating the human capital problem has been the lack of technology investment in recent years. Revenue-generating areas of the business, such as loan origination and loan trading, as well as regulatory compliance, have dominated spend leaving little, if anything, to address the spider’s web of servicing and operational infrastructure that underpins lending (see a blog Helen Orton wrote on this topic last year). Rising operation and reconciliation costs, along with the deterioration in service quality for borrowers and participants, are the inevitable consequences of this lack of investment.

So, with a new year upon us, never has there been a better time to consider how technology can transform people and processes to continue driving growth for businesses in the corporate lending space and create a long-term competitive advantage.

Where is the low-hanging fruit?

Eradicating the need for individuals to input single data points across multiple applications would be a significant first step in the industry’s transformation. The continuous re-keying of information is extremely time consuming and prone to human error.

One way to address this is by embracing APIs that connect disparate systems and enable data to reach multiple people in real time. This would also enable organizations to make decisions faster using data that is, ultimately, more accurate and complete. This is driven not only by automating the data flow between processing systems, but also by facilitating access to additional types of data that currently cannot be included in the process.

To address the human capital problem and spiralling technology costs, as well as the continued use of on-premise technology deployment, banks are increasingly moving their operations to cloud and Software-as-a-Service (SaaS) to realize cost and agility benefits. This is allowing banks to more closely align technology costs to business outcomes.

Future proofing with technology

Despite the 2025 growth outlook, the corporate lending market will not be immune to challenges. The economic volatility and geopolitical uncertainty we’ve seen in recent years are not out of sight, and any new impacts on the financial markets could cause fresh headwinds. The human capital problem is also not going away unless action is taken.

Technology modernization will continue to be a fundamental catalyst of success for those seeking to seize the growth opportunities that are available – now and further into the year. In fact, we are confident that by embracing modern technology, the industry will be well positioned to grow sustainably and navigate challenges in the long term.

^{1. “Corporate Lending Market Report”, BlueWave, May 2024}

^{2. “Modernizing corporate-loan operations”, McKinsey & Co, January 2024}