How We Are Restructuring Our Loan Process [Recorded Webinar]

Loan Processing

One of our strategic initiatives is to move our loan process to a digitally credit scored and processed model. The concept, which we explained in a previous blog post HERE is to better match resources with risk, and in so doing become more efficient for our customer and the Bank. Our old process was to apply similar underwriting and credit review process to every loan. This structure made loans below $400,000 often unprofitable. Earlier this year we rolled out our Business Express platform to dramatically improve our process. This week, we held a webinar with our Business Express Task Force team to explain our journey to date and to hopefully inspire other banks to do the same.  


The Project


On the webinar, our team walked bankers through how we have dramatically reduced both time and the cost of underwriting our small business clients as we move forward to having a fully mobile application where our business development officers can sit with a client in the field and help with taking a loan application. The goal of our effort is to increase customer satisfaction, speed up reaction time and increase profitability. By lowering our acquisition and processing cost, our cumulative risk-adjusted lifetime value of our clients becomes much more valuable. In addition, having a more efficient loan platform helps our M&A effort as we can now look at a wider variety of transactions due to greater cost savings and gained efficiencies.  


Finally, we are preparing ourselves to better compete with online and marketplace lenders. We have looked at and are still considering a wide variety of partners and technologies to further expand our digital lending capabilities. Our Business Express effort is designed to be at the core of our effort. As can be seen below, banks are still in the early stages of being able to handle applications, service requests, preapproval and scoring through all digital channels. 


Small Business Digital Loans


The Impact


We started our Business Express program to first target loans below $250,000. The Program has impacted some 35% of our total number of loans, a number that will grow to 50% when our program is completely rolled out, handling larger dollar sizes and more loan types. This multi-phase, multi-department effort has already reduced approval time from days to hours. Check out some of these statistics:


Loan Origination


Leveraging our partners, D+H, Experian, Paynet and others, we created a two-tiered scoring model. For loans below $75,000, we have an annotated “Score & Go” algorithm, while loans between $75,000 and $250,000 get a more in-depth review requiring more data inputs, including tax returns.


To hear from our Task Force team directly and learn more about how we changed document prep, installed service level agreements, leveraged LEAN as a project management tool, used “Value Stream Mapping” to identify opportunity for increased efficiency and executed our plan, you can still register and listen to the recorded webinar HERE .


When we were just starting off on this journey, other banks that have been down this path were kind enough to open their doors and share their insights. Now, we look to pay it forward and help other community banks learn from our successes and mistakes. Since this is a multi-year, multi-discipline project that has revolutionary strategic and tactical shifts, look for other updates from us in the form of blogs and future webinars. In addition, if we can be of any help with your community bank’s initiative, we stand at the ready to help.