The terminology used by lending professionals can leave your head spinning, sometimes even if you’re a lending professional yourself.
As digital lending technology advances, the language can get even more confusing. At SPARK, we’ve seen this progression first-hand as we’ve built our SaaS (software-as-a-service) lending platform for commercial and SBA lenders.
It’s high time that somebody created a glossary to help you keep everything straight when it comes to lending technology.
We’ve broken the terms into relevant categories for easier reading and navigation. If at any point you’re looking for a specific term, hit Ctrl+F (Windows) or ⌘+F (Mac) and begin typing the desired word.
Use this guide as a reference for yourself and your team as you work to create a smoother digital lending experience at your organization.
Software and Platform Basics
Application Programming Interface (API)
A set of protocols that allow easy integration between two software applications. With SPARK’s APIs you can integrate with other platforms and third-party vendors.
Customer Relationship Management (CRM)
Software that helps manage a company’s interactions with current and future customers. CRMs hold customer contact data and facilitate regular communication and support.
Cloud Computing
The delivery of computing services over the internet, including storage, databases, servers, and software.
Loan Management System (LMS)
Software designed to handle the loan lifecycle after the funds have been disbursed. Not to be confused with a loan origination system (see below).
Loan Origination System (LOS)
Software that helps lenders facilitate loan applications, disbursement, and tracking.
Product Roadmap
A strategic document used by software companies to outline the vision of what the product will look like in the future. Usually, it lists features and estimates of when they will be ready for release to the public. At SPARK, our product roadmap is subject to change based on feedback from users.
Software-as-a-Service (SaaS)
Software that you access via the internet rather than installing locally on a device. Often, SaaS products require a subscription fee and may include usage fees.
Software Development Lifecycle (SDLC)
The process of developing software through different stages, such as planning, coding, testing, and maintenance.
Third-Party Integrations
Technological bridges between software applications, designed to complement functionalities into a primary software platform. Usually done with the help of APIs (see above).
UX/UI (User Experience/User Interface)
The look and feel of the software, including visual design and content. It is usually referenced when speaking about how user-friendly the software is and how it meets users’ needs
Data Management and Integration
Artificial Intelligence (AI)
Complex algorithms that can process large datasets and determine outcomes based primarily on statistical probability. Although often perceived as comparable or superior to human intelligence, AI programs lack the contextual knowledge and situational discernment of human beings.
Decision Engine
A system that sorts through multiple variables to make an automated decision based on predefined criteria. Sometimes incorporated into an LOS (see above) to help process loan applications.
Data Integration
Combining data from multiple sources to provide a unified view. It may require additional software to combine, clean, analyze, and present the data in a digestible way.
Data Migration
The process of transferring data from one system to another.
Machine Learning (ML)
A subcategory of artificial intelligence that enables software to learn from data and produce models that can be used for specific tasks, such as predicting a person’s propensity for taking a loan or their likelihood of defaulting on a loan.
Optical Character Recognition (OCR)
Technology that converts different types of documents, such as scanned paper documents, images, or non-editable PDF files, into a digital, editable format. SPARK uses OCR technology to convert written paperwork from loan applications into an editable format accessible to anyone on your team.
Workflow Automation
The design, execution, and automation of business processes based on workflow rules. SPARK allows you to create custom workflows to manage loan applications, compliance processes, and other tasks within your lending process.
Security and Compliance
Automated Server Patching
The automated process of applying patches to server software to correct issues and improve security.
Cloud Engineering
SaaS lending platforms such as SPARK rely on the distributed server technology commonly called cloud computing. Cloud engineering uses development frameworks and practices for software implementations and deployments.
Data Backups
Secure data copies that can be used to restore the original data in case it’s lost.
Data Encryption
Converting data into a cryptographic cipher to prevent unauthorized access. Data can be encrypted during movement (when it’s being used) and at rest (when it’s in a static, saved state on a hard drive).
Data Security
The general discipline of protecting data against unauthorized access or alterations. It includes technology such as encryption and multi-factor authentication, as well as access control for personnel.
Firewall
A network security system that monitors incoming and outgoing traffic based on predetermined criteria.
Infrastructure Redundancy
Duplicate systems and associated data stored in multiple servers in different locations, which can take over if the primary infrastructure fails. This is a common practice among SaaS providers, as it greatly reduces the risk of total data loss.
Intrusion Detection/Prevention System (IDS/IPS)
Technologies that monitor network and/or system activities for malicious actions or security policy violations. IDS is designed for detecting potentially harmful activities, while IPS takes the extra step to block those activities.
Multi-Factor Authentication (MFA)
A security measure that requires more than one method of authentication to verify a user’s identity, such as password, SMS, or email.
Penetration (Pen) Test
A simulated attack against a computer system to check for exploitable vulnerabilities.
Secure Coding
Software development techniques that prioritize security to prevent vulnerabilities and threats.
Service Organization Control (SOC) 2 Type I and Type II
Auditing procedures that assess the security of service providers. After passing an audit, service providers receive a certification.
Transport Layer Security (TLS) Protocol
A cryptographic protocol designed to provide secure communications over a network.
Vulnerability Scan
An automated, high-level test that identifies potential vulnerabilities in a system or network.
Miscellaneous
Change Management
A structured, systemic, and comprehensive approach for implementing changes throughout an organization.
Load Balancers
Devices or software applications that distribute incoming network or application traffic across multiple servers. This is done to ensure that no single server is overwhelmed with too much load, thereby optimizing resource use and minimizing latency.
Multi-Tenancy
A software architecture where a single instance (or installation) of the software serves multiple customers. This allows for a very consistent and stable user experience.
Quality Assurance
A software development process that verifies that a piece of software or an entire platform meets specified requirements without errors or bugs.
User
An individual who uses the software or system. In the case of SPARK’s SaaS lending platform, users include employees within your organization and loan applicants.
SPARK: Easy to Understand and Use
The lending process is complicated enough without trying to piece together technology and lending terms that aren’t necessarily intuitive.
While this list of terms isn’t exhaustive, it’s a good start to understand what they mean at SPARK and in the SaaS lending platform ecosystem in general.
Just like this glossary can help simplify the confusing language of digital lending tech and software development, SPARK’s software simplifies and streamlines the tedious, mundane, and compliance-heavy aspects of lending.
Tech language might get complicated, but rest assured that using SPARK is as simple as it gets.
If you’re ready to take your commercial lending operation to the next level, request a demo, and we’ll show you what’s possible.
