There is a correlation between the speed of commercial loan closing and bank profitability, and there are many reasons why banks that close loans faster can generate more profits. While banks should be focusing on closing loans faster, there are other techniques that banks can deploy to enhance customer experience while keeping loan closing speeds unchanged. Banks can leverage operational transparency to improve both perceived and objective service performance.
Tag: Loan Closing
Sometimes in banking, the closing of a particular loan or deposit transaction drags on for no other reason than the customer is reluctant to agree to the terms either for spoken or unspoken reasons. At CenterState, we have learned some valuable lessons from other banks that have helped us close more transactions and can help every relationship manager gain more of an advantage to cut down closing times and increase their closing percentage. In this article, we break down these five lessons.
We have written in the past about the importance of community banks closing loans as quickly as possible after the borrower’s acceptance of pricing and terms. Banks that can close loans with alacrity can earn a higher return on the credit and deliver better customer satisfaction. In today’s environment the following factors are creating incentives for banks to close loans quickly: a) intense competition, b) Federal Reserve raising interest rates, c) a flat yield curve motivating borrowers to favor fixed-rate loans (with more risk to lenders), and d) political uncertainty translating to ma
When it comes to commercial loan closings, we have found that speed and bank profitability are correlated. This is to say that the faster you can close a loan, the more likely you are to be booking more than your share of loans. We are not sure which way the cause and effect happens – either you are good at closing loans, and so that drives business, or you are good at driving loan business, so you learn to close loans fast, but it doesn’t matter as speed and loan success go hand and hand.