Three Trends Reshaping Lending — And Why Document Intelligence Is at the Center

The lending landscape is shifting fast. From how small business creditworthiness gets assessed, to how mortgage operations process thousands of invoices, to where capital is flowing in credit markets — the common thread is clear: the organizations winning are those extracting better insights from unstructured data, faster.

Here’s what’s happening, and what it means for lenders, servicers, and credit investors.

1. Cash-Flow Underwriting Is Proving Its Worth

Traditional small business underwriting has long relied on personal credit scores and basic firm characteristics. But a significant body of research is now showing that’s not enough.

FinRegLab’s Sharpening the Focus report, analyzing over 38,000 small business loans, found that incorporating electronic bank-statement cash-flow data into underwriting models produces meaningfully better predictions of default risk. The improvement is especially pronounced for young businesses and financially constrained owners — precisely the segments where traditional models fall short.

The implication: Lenders who can efficiently extract, normalize, and analyze cash-flow data from bank statements gain a real underwriting edge. But bank statements arrive in dozens of formats — PDFs, CSVs, images, multi-page documents with inconsistent layouts. Turning that unstructured data into decision-ready insights at scale requires intelligent document processing.

2. Automation Is Collapsing Loan Processing Times

United Wholesale Mortgage recently shared results from automating their invoice processing workflow: processing time dropped from approximately three minutes per loan to roughly 30 seconds.

That’s not incremental improvement — it’s a fundamental change in operational capacity. Fewer manual touchpoints. Faster document-to-decision cycles. Teams freed to focus on exceptions and higher-value work rather than data entry.

The pattern here is instructive. Mortgage operations — like most lending operations — run on documents: invoices, appraisals, title reports, income verification, insurance certificates. Each document type has its own structure, its own variations, its own extraction challenges. The lenders pulling ahead are those treating document understanding as core infrastructure, not a back-office afterthought.

3. Private Credit Is Scaling — And So Are Its Data Challenges

The private credit market continues its rapid expansion. According to Preqin forecasts, assets under management grew from around $1.5 trillion at the end of 2023 and are projected to reach approximately $2.6 trillion by 2029.

As banks have retrenched from certain lending segments, private credit funds have stepped in — originating and holding debt directly, often in more complex or specialized asset classes.

But scale brings complexity. Private credit investors are underwriting deals across diverse industries, each with its own documentation standards. They’re monitoring portfolios that span thousands of borrowers, each generating financial statements, covenant compliance certificates, and operational reports in different formats. The ability to systematically process and analyze that document flow isn’t optional at $2.6 trillion in AUM — it’s existential.

The Connecting Thread: Unstructured Data at Scale

These three trends point in the same direction. Whether you’re a small business lender trying to underwrite cash flow, a mortgage servicer automating invoice processing, or a private credit fund monitoring a growing portfolio — your competitive advantage increasingly depends on how well you handle unstructured documents.

The winners aren’t just digitizing paper. They’re building intelligent pipelines that extract structured data from chaotic inputs, apply business rules consistently, and surface insights that drive better decisions.

That’s the problem we solve at Kodexa. Our AI-powered document intelligence platform helps financial services organizations transform unstructured documents — bank statements, invoices, financial reports, compliance certificates — into structured, actionable data. At scale. With the accuracy that regulated industries demand.

The lending market is evolving. The question is whether your document infrastructure is evolving with it.

Want to see how Kodexa handles the document types in your workflow? Get in touch.