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How does Loan Lifecycle Management technology assist with customer growth and retention?
►Helps streamline loan processes► More efficiencies for new loans, renewals, and reviews► Reduce bottlenecks so priority decisions/customers can be treated as such► Can provide better management of covenants, ticklers, and communications
►Provides better analysis and data► More effective decisions, often in a much quicker timeline► Data can lead to better understanding of the customer and cross-sell opportunities
►Allows Relationship Managers more time to focus on relationships
Secure online database tracks client demographic information and prior interactions, in addition to prompting applications when appropriate
Credit Analysis
Powerful toolset allows for storage of unlimited financial statement data as well as automated ratio, collateral, accrual/cash basis, enterprise and earned equity analyses
Credit Presentation
Use of single system standardizes credit presentation across an institution and is fully configurable to meet unique needs; paperless process eliminates physical constraints and allows for remote lending committee meetings
Decisioning and
Approvals
Flexible program fits all types of credit requests but also utilizes standardized “credit action” and scoring/rating models
Servicing and
Monitoring
Automated system tracks repayment patterns and produces alerts; also checks insurance and UCC filings
Portfolio Risk Management
Intuitive risk management toolset allows user to shock/stress test a single loan, a pool of loans, or an entire portfolio, as well as identify weaknesses and generate ad hoc reports
All Loan Types
Commercial Commercial Real Estate Construction
Commercial & IndustrialAgriculture Small Business Consumer
►The Myth: Use of scores and auto-decisioning doesn’t work in a relationship banking environment► Business Development leaders fear reducing long-term relationships to a score
►In reality, the use of models will enhance relationships► Creates a more transparent and consistent relationship
► Treatment doesn’t change with change in personnel
► Enables Business Development groups to be proactive with high-scoring customers► Can say YES more quickly by auto-decisioning the A+ relationships► Possibly bypass application paperwork with A+ customers
► Provides performance improving strategies for low-performing customers► Reason codes point to areas of improvement► Allows the institution to educate marginal customers
Scoring and Analytics: Relationship Banking and Scoring
►Customer #1:► $14B loan portfolio/mostly scored► The score is not the only factor: “Don’t check your brain at the door.”► However, remember the value of the score…
►Customer #2:► Original solution need/focus was to better service large C&I and CRE deals
Loan Lifecycle Management—Customer Stories
“74% of the bad accounts in our scored portfolio are where the underwriter overrode the suggested decision of the scorecard.”
“Serving small business borrowers requires speed and objectivity. Using WebEquity with the FICO SBSS scoring enabled us to cut our underwriting time from 2 days to 2 hours, and we significantly decreased early delinquencies. We’re winning more business, much more efficiently.”
► Asset Size: $1.6B► Original solution need/focus was to better service large C&I and CRE deals► What the customer noted as realized benefits
► Increased operating efficiency ► Decreased Underwriting time from 2 days to 2 hours► Cut overall decision turnaround time
► Increase in customer satisfaction/retention► Standard and consistent approach to each credit application► Early delinquencies (past due loans from 30–turn rates)
Technology—Customer Stories
“Serving small business borrowers requires speed and objectivity. Using WebEquity with the FICO SBSS scoring enabled us to cut our underwriting time from 2 days to 2 hours, and we significantly decreased early delinquencies. We’re winning more business, much more efficiently.”
Compete and Win with Technology Driven Loan Lifecycle Management
►Two Primary Themes► Loan Lifecycle Management► Technology—helps community and midsized banks compete
►Myths Busted► Use of scores and auto-decisioning doesn’t work in a relationship banking environment► Community Banks don’t have access to powerful and affordable technology► The Cloud is less secure than on-premise installations
Related Sessions► Fuelling Growth with Centralized, Analytics-Based Credit Decisions►Why a Hosted Credit Decisions System Makes Sense►A Strategic Risk Infrastructure: Making Better Lending Decisions and Improving Customer Experience►One World, One System: Global Originations Deployment►Optimize Originations for Profit and Success
Experts at FICO World►Mark Ryan►David Lightfoot►Alan Pass