Automated Financial Systems, Inc. (AFS) is set to retire its respected AFS Level III commercial loan accounting and servicing product platform in 2021. The 20-plus current users of AFS Level III in the U.S. have an opportunity to select and implement their best-fit target platform. The savvy ones will take advantage of it, at the same time, to extend their technology innovation a bit further and enhance their processes all along the lending value chain.

Based on our vantage point of having worked with top lenders as well as AFS, we have assessed the industry’s readiness for this change. We offer six observations that all affected commercial lenders should think through as they create their transition plans to a new loan servicing platform.

1. Lenders are more aggressive than expected.

Nearly 60 percent of impacted banks have selected and are implementing their target platform(s) or are ready to do so in a few months.

2. Slow movers risk missing the 2021 deadline.

We see 18–24 months as a realistic replacement timeframe. Lenders that begin after Q1 2020 may not make the deadline and could incur higher costs.

3. Use the event to add value around the platform.

This is an opportunity for lenders to review their strategic aims and work out how the new platform can help realize them.

4. So far, no platform is a clear-cut winner.

While best-in-class vendors are likely to win big, options, like a lender’s existing banking suite, are contenders. No solution fits in all cases.

5. Lenders’ first hurdle: resource scarcity.

Skills are critical to any successful platform transition. Lenders should start building capacity now, across both operations and technology.

6. Lenders’ biggest hurdle: data.

Downstream data architecture and integration is a critical implementation path. Lenders must determine how best to handle it to optimize efficiencies.

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We can help lenders impacted by the AFS Level III retirement make the most of a successful transition to a new platform—and improve their business along the way.

Jared Rorrer

Managing Director – Global Commercial Banking Lead​

Ryan Shenoha

Managing Director – Commercial Credit, North America


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