The worldwide market size of the loan servicing software sector appears set to grow by $2.7 billion over the next four years, according to technology research company Technavio.
Forty-nine percent of that market growth is set to be contributed by a rich field of North American companies, Technavio noted, with key market players including ICE Mortgage Technology and Constellation Software, which acquired the former Black Knight’s Empower and Optimal Blue businesses last year as part of Black Knight’s merger with ICE.
Globally, Technavio sees market growth of the global loan servicing software market at 10.84%, with a compound annual growth rate at 12.01% from 2023 to 2028. Rising demand for more efficiency and automation within loan management platforms is pushing substantial expansion of the market, which is growing both more lucrative and more competitive.
With the market prioritizing customer service factors like user experience and data security while promoting reduced workloads and improved artificial intelligence integration to help companies scale their personnel, a growing pool of vendors is increasingly turning to strategic partnerships and acquisitions.
Technavio cited the April alliance between outsourcing company PrivoCorp with software provider Calyx Software, combining the former’s mortgage processing services with Calyx’s advanced loan origination system. Other similar collaborations have been simmering more lately, enabling vendors to beef up their product offerings, expand their geographical reach and offer more technological expertise.
Technavio also noted several challenges for the loan servicing software market, including integration challenges among the myriad mergers and collaborations popping up throughout the industry. Additionally, costs remain an ever-present concern, especially when it comes to continually developing the technology to service complex loans, handle high origination loads, and assess and manage risk. The ongoing rise of cloud-based solutions also consistently begs data security concerns, especially with a rash of cyber breaches affecting mortgage lenders and other mortgage companies in 2023 and 2024.
