Perhaps auto lenders aren’t depending on typewriters and fax machines, but Carleton sees the consumer lending industry facing mounting pressure to modernize aging technology infrastructure.

The provider of compliant loan calculation and disclosure solutions made that assertion on Tuesday after Carleton released findings from its inaugural Platform Migration and Modernization Survey.

While urgency is near universal, Carleton said a significant share of lending institutions remain anchored to legacy systems that expose them to growing compliance, security and operational risk.

Survey orchestrators said their data paints a picture of an industry in transition, but one where the pace of change remains slow relative to the scale of the operational, compliance, and security risks involved.

Nearly nine in 10 respondents — 87% to be exact — are engaged in migration in some form, yet only 8.7% have fully completed the process.

And 74% of respondents described their current environment as primarily legacy, with just 10.6% operating on a fully cloud-based platform.

Carleton pointed out that it discovered a “striking” gap between awareness and action.

A combined 76.5% of respondents rated the need to modernize their platform as extremely or very urgent.

At the same time, more than one in five organizations (23%) reported they are still only considering migration without a defined timeline.

“For an industry built on precision calculation and regulatory accountability, that gap represents significant and compounding exposure,” Carleton said in a news release.

So, what Is holding lenders back from making significant changes? Is it just a cost hurdle?

Carleton explained the barriers to migration are structural, not philosophical.

Survey respondents who have delayed modernization pointed most frequently to cost constraints, cited by 28.6%, and limited internal resources, cited by 31.6%.

Disruption concerns were cited by 15.6% of respondents, reflecting a deeply ingrained caution about operational continuity during a system transition.

Furthermore, Carleton said only 5.3% of respondents cited confidence in their current system as a reason to delay.

“This tells an important story: the industry is not avoiding migration because it believes its legacy platforms are working well,” Carleton said. “It is avoiding migration because the path forward is viewed as costly, complex, and risky in ways many organizations do not yet feel equipped to manage internally.”

Researchers noted the operational burden of legacy systems compounds the problem.

One-third of respondents reported spending 80% to 100% of their platform resources on maintenance rather than new development.

An additional four out of 10 survey participants said they spent between 60% and 80% of those resources on maintenance.

“Organizations carrying that level of overhead have limited internal capacity available to support large-scale modernization initiatives, creating a cycle that is difficult to break without external support,” Carleton said.

And here’s another part of the complex situation.

Carleton sees risks escalating of lenders simply staying still on the technology front.

Compliance risks were cited as the most common operational challenge, identified by 35.4% of respondents.

Calculation accuracy was named by 23.2% as the area of their platform most in need of modernization, “a figure that carries serious implications in a regulatory environment where incorrect consumer lending calculations can trigger enforcement scrutiny, borrower harm and reputational damage,” Carleton said.

Researchers mentioned that implementation timelines reveal another layer of the problem.

Nearly one-third of respondents said it takes six months or more to implement a new product or regulatory change, and 12.7% report timelines exceeding one year.

“Institutions operating that slowly face increased exposure as regulatory updates and market demands move faster than their systems can adapt,” Carleton said.

Finally, Carleton acknowledged that security concerns compound the situation further.

A security incident was identified as the single most likely event to trigger modernization, cited by 30.2% of respondents.

“The pattern is troubling: for too many institutions, the forcing function for migration is a crisis rather than a strategy,” Carlton said.

The survey also revealed that organizations are increasingly looking for strategic guidance alongside technology solutions.

Nearly two-thirds of respondents identified hands-on migration support as the most valuable resource in helping modernize their lending platforms.

“The survey findings echo what Carleton hears in sales and client conversations every day,” Carleton vice president of business development Tim Yalich said. “Institutions still running on legacy systems, some more than two decades behind their industry peers on technology, are not simply managing aging infrastructure.

“They are limiting their ability to compete, to grow into new states or asset classes, to integrate with modern fraud prevention tools, and to access the AI-enabled capabilities that are rapidly reshaping how lending decisions are made and monitored,” Yalich went on to say.