I just returned from speaking at a Strategic lending Conference. Good crowd, nice place, decent people, not much action or reaction. What? Yes, even though most of the folks in the room heard the presenters, and generally agreed with a lot of the thoughts and ideas, consensus from the group is that change is hard, especially strategic change.
I presented a number of thoughts and solutions for growing loans, after all, it was a strategic lending conference. So while a number of the issues I presented could be implemented now, the idea was to get the audience thinking, and eventually acting strategically.
Automation, AI, aggregating and utilizing big data, point of sale lending, and overall increasing efficiency and loan market share were, if not the main topics, major parts of every presenter I heard for two straight days, including my presentation.
In fact, I picked up some great data from several other presenters. For example:
Time-Consuming Underwriting and Loan Operations?
In a recent survey of some kind, bankers, credit unions and finance company executives were asked what areas of their financial institutions need the most process improvement. Among respondents, 35 percent said they needed improvement in underwriting or credit analysis, 28 percent pointed to loan operations, 25 percent said lending with the final 12 percent of respondents split between management reporting and other categories.
Then the process went deeper and, as indicated in the graph (pictured adjacent), respondents indicated overwhelmingly that they know that they should and could cut nearly 50% of the time and effort (Cost?) in their loan underwriting/origination processes. The respondents believed that they should be able to do just about everything twice as fast and effectively as they do things now. That’s incredible! But True!
The survey went further and deeper, asking Executives specifically: what areas of their operations need the most process improvement? The answer was rather astounding to me. Lending, Loan Operations and Underwriting consisted of 88% of their major issues and concerns. That’s not a big surprise to me. For most financial institutions, and virtually every finance company, loan income (Lending) drives between 70-98% of all revenue.
What astounded me, and still does, is that these exec’s know they need to improve, and I believe they know the solutions are in the marketplace to help them make the changes necessary to compete and be better and more profitable.
They just aren’t doing it!
Granted, a lot of my most recent audience were board members of Credit Unions, but that’s no excuse. Boards should be strategic in their thinking, and boards should drive, push and provide clear strategic direction to management to get the job done.
With at least 50% process improvement when automation is implemented into lending operations, there’s simply no excuse in today’s marketplace not to be automated. Ask CU Lending Edge clients what they would do without automation? CU Lending Edge is a client of Lendsys and utilizes the Automated feature and processes in the Lendsys LOS platform to automate loan decisions at point of sale and internally in the 40-60%+ range. Why is every Credit Union and Community bank not using Lendsys or CU lending Edge’s Automated Engine? I don’t know. But if you are reading this, you now have no excuse not to automate. I bet if you look at your organization’s strategic plan, automation, increasing efficiency, and growing loan volume are clear strategic directives.
Awareness is the first step in discovery
If you are not familiar with the Lendsys LOS platform and you are thinking strategically about loan growth, increases in market share, internal efficiency, scalability and reducing costs, you are now aware of an alternative, at least something to take a look at.
In the meantime, I’ll stay positive and hope that there are progressive, strategically-thinking Banks, Credit Unions and Finance companies that want to do more than just survive. Achieving leaps and bounds in efficiency is not impossible. If we learn to let go of the old ways, embrace technology, automation, and truly open our minds to doing things more effectively and efficiently, the solutions are right in front of you. Literally!