Challenges and innovations in construction financing

Construction financing is undergoing an epochal change that not only offers opportunities, but also significant challenges for banks. This change is not only driven by digitalization, but also by a decline in new business volume while interest rates are rising. Traditional banking models are on the verge of a paradigm shift that requires innovative solutions and increased customer orientation.

Digital challenges and the pressures of new business

The volume of new business in the area of private mortgages recorded a noticeable decline. This trend has continued in the first nine months of last year, challenging banks to rethink their strategies. At the same time, digitization in the financial sector remains a constant challenge. Implementation is often slower than desired, as regulatory requirements and complex bureaucratic processes characterize the industry.

Rising interest rates and refinancing pressure

Interest rates are rising, which puts banks under additional refinancing pressure. At the same time, customers are becoming more demanding and expect their financial transactions to be handled efficiently and in a modern, efficient manner. Banks must not only keep up with technological developments, but also offer flexible and customer-friendly financial products in order to remain competitive.

The decisive challenge: Banks must remain relevant

The biggest challenge is that banks are at risk of losing relevance in the midst of these changes. Customer interaction is increasingly shifting to digital platforms, and banks need to find ways to stay present in this environment. Competition from FinTechs and BigTechs is further intensifying competition.

Strategic Responses: Customer Centricity and Innovative Technologies

To meet these challenges, banks need to realign their strategies. A stronger focus on the customer and the implementation of innovative technologies are indispensable. It is crucial not only to follow technological advances, but also to focus on customer needs.

The BaufiServiceApp as a guide in the new era

In this context, the BaufiServiceApp from Sopra Financial Technology represents a groundbreaking solution. With features such as quick decisions, paperless efficiency, automated processes, customer-centric dialogue and transparent communication, the app addresses the current challenges of construction financing.

The future of construction financing lies in the active design on the part of the banks. Through increased customer orientation, innovative solutions and the integration of modern technologies, especially through the BaufiServiceApp, banks can not only meet the current challenges, but also usher in a new, customer-oriented era of construction financing. This requires not only technological know-how, but also the willingness to continuously adapt to the changing needs of customers.

For more insights on this transformation, check out our LinkedIn post.