Strategies, Best Practices and Thought Leadership

Why Process Improvement & Efficiency Remain Critical

From biometrics to Blockchain, the industry continues to focus heavily on the latest innovations as ways to stay competitive. However, while discussions around process improvement and efficiency are not new, it is time that banks and credit unions revisit these areas with a fresh perspective to maximize opportunities for growth 

This is particularly critical for small business customers. Let’s face it – small businesses are among the most valuable customers for institutions, but oftentimes, the way in which a small business loan is processed mirrors that of a large commercial loan. Not only does this result in serious inefficiencies, but the customer experience is typically thrown to the wind. Because of a lack of efficiencysmall businesses – even those with adequate credit history – may wait several days for a credit decision.  

The answer to tightening processes? Going back to the basics.  

Simplify the Loan Application Process  

First, institutions must simplify the loan application process with auto-fill technology. By automatically pulling existing information from the core system, auto-fill minimizes data entry for customers and saves time for employees. Ialso reduces errors from inputting the wrong information.  

Beyond the loan application, minimizing duplicate data entry, integrating data across platforms and making it easier to access for employees supports more efficient underwriting and decisioning. By reducing the time spent tracking down the right data, employees can instead apply analytics to multiple data sources to quickly evaluate the creditworthiness of a small business. 

Offer A Digital Customer-Facing Portal  

The second step towards greater efficiency is to offer a digital customer-facing portal. This will allow customers to quickly review requests for supporting documentation, upload any additional information and check on the status of their loan application – all on their own time.  

Additionally, it reduces the time employees spend following up with customers, which can not only result in wasted time going back-and-forth, but also frustrate customers. Imagine running a business and having to pause during your business hours just to send additional information to a loan officer?  

Break Down Barriers Within Your Credit Department  

Another frustration for customers is finding someone who knows and understands the status of their loan request. This also slows processes for the institution. But leveraging technology that facilitates the access and sharing of loan applications between branch networks, or directly to customers through online banking, makes it possible for employees within the credit department to collaborate. Rather than waiting on a specific loan officer, several employees can assist as needed and address the customer’s needs much quickly.  

Gain A Holistic View of Your Portfolio 

Last, banks and credit unions must have a complete understanding of their portfolio to quickly address problem credits, which means they must streamline their process for monitoring risk. Currently, many institutions track down data in Excel spreadsheets and other various documents, and then manually calculate how the portfolio is performing. But with proactive, data-driven portfolio monitoring and more efficient statement spreadingemployees can not only detect risk, but also when a business customer may need a different product or new service, opening up new opportunities.  

Eliminating sources of inefficiencies will prove beneficial to employees and small business customers, as well as the institution’s bottom line. It requires going back to the basicssimplifying the application process, delivering a customer portal, opening up communication and collaboration within your credit department, and gaining a complete view of your portfolio by streamlining risk monitoring. Tapping into these efficiency gains and improving the customer experience will ultimately lead to increased competitiveness.   

Topics: Commercial Lending, Market Trends

Baker Hill

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