This SMB Lending Insights report is a snapshot of current financial trends and metrics that impact small and medium-sized business (SMB) lending and financial institutions. SMBs and financial institutions face tremendous uncertainty in the current environment, which is characterized by elevated interest rates, high inflation, and growing personal delinquency rates. The report outlines SMB loan origination trends, delinquencies on SMB loans (90+ Days Past Due, or DPD), and changes in the average loan sizes for various industries. Financial institutions can consider this information to benchmark trends at their own institution and to evaluate plans.
The report is based on data from Abrigo Small Business Lending Intelligence, a lending decision and monitoring engine powered by Charm Solutions. Abrigo Small Business Lending Intelligence uses observations from Abrigo’s client base of over 2,400 U.S. institutions to provide a comprehensive representation of the banking and financial sector.
Understanding the latest loan review benchmarks and trends
The 12th annual loan review industry survey from Abrigo (formerly DiCOM) reveals key loan review trends from financial institutions ranging from $100 million to $100 billion in assets. It also highlights some of the key challenges that loan review teams are facing and what strategies they are employing to overcome them.
This resource will show information on:
- Department staffing and roles
- Loan review team priorities
- Common reporting lines
- And more
The FedNow Service, which went live in July 2023, is the new instant payments infrastructure developed by the Federal Reserve to enable real-time payments between all financial institutions on behalf of their customers or members. However, some banks and credit unions are waiting to adopt FedNow until kinks in the system are worked out. Ultimately, the faster payment method could easily replace ACH, check, and card payments.
The payment rail has some built-in anti-fraud capabilities, and fraud and AML/CFT staff can take several steps during their institution’s FedNow implementation to combat and reduce fraud. Read this whitepaper to learn:
- How and at what pace your institution should implement FedNow
- Anti money laundering and fraud implications for FedNow and parameters to understand before adopting at your institution.
- Best practices for adopting FedNow, including employee training, customer education, and infrastructure reviews.
Global sanctions are an essential tool that governments use to address international security threats, combat terrorism, prevent money laundering, and curb illicit activities. These sanctions typically involve restrictions or prohibitions on specific individuals, entities, or countries, limiting their access to international financial systems. Considering the current economic and political environment, it is crucial that financial institutions maintain a strong sanctions compliance program (SCP).
The release of the FinCEN Files in 2020 detailed the extraordinary amount of illicit funds flowing through our financial institutions from kleptocrats, international money launderers, and terrorists. Greater regulatory scrutiny has been placed on transactions to and from sanctioned countries, individuals, and entities, and it is expected to continue as a hot topic for examiners, especially as the situation with Russia escalates. In 2019, OFAC issued new guidance on the essential components of a strong OFAC compliance program. Now more than ever, the guidance is an important tool in creating an effective SCP.
Download this whitepaper to learn:
- How to incorporate OFAC guidance into your SCP.
- Common root causes of non-compliant SCPs and how to avoid them
- Five components of an effective sanctions program
Check out these additional AML/CFT resources:
- Checklist – Russian sanctions compliance checklist
- Webinar – Balancing compliance risk and reward with high-risk businesses
- Whitepaper – AML investigations checklist: Red flags for detecting money laundering
Risk management is at the very core of the business of banking. It’s also a fundamental differentiator between financial institutions. Institutions that identify, measure, and manage risk most effectively will outperform their peers in terms of financial performance while also maintaining safety and soundness. This is especially true during economic downturns, when institutions may confront increasing credit risk in their loan portfolios as well as liquidity risk, interest rate risk, and pressure to maintain appropriate capital levels.
This whitepaper will take a closer look at some of the existing risk management practices employed by financial institutions today and the areas of overlap and interaction between them.
The pandemic triggered a distinct change in monetary policy that has had profound effects on the financial services mergers and acquisitions (M&A) environment. Marks on acquired assets and liabilities are moving in parallel with the increases in interest rates. The Federal Reserve’s continued effort to rein in inflation has created additional uncertainty. Consequently, deal values are likely to continue showing very different results between the initial due diligence process and the completion of a transaction.
This whitepaper describes key trends we have observed in the valuation of loan portfolios, core deposits and the related intangible, time deposits, and debt instruments.
In this whitepaper you will learn:
- The potential magnitude and direction of changing values
- How changes can impact the balance sheet
- Other valuation and purchase accounting implications
Increasing loan review demands and limited loan review staff are resulting in increasing use of workflow automation software, according to Abrigo’s 2022 industry survey. But the survey also revealed a disconnect between the objectives of loan review and how those objectives are carried out. With respondents from banks in the $1 billion to $100 billion asset range, this survey highlights some of the key challenges that loan review teams face and the strategies they are employing to meet them.
Download for benchmarks and insights into:
- Department staffing roles and organization
- Loan review priorities and processes
- Credit risk management process and reporting lines
- Factors used to evaluate risk
The dark web is ground zero for check fraud. There, criminals buy and sell stolen checks, then use them to defraud your financial institution and customers. Abrigo and Q6 Cyber, a leading e-crime intelligence provider to financial institutions, examine the true costs of a stolen check, and how financial institutions can fight the surge in check fraud proliferating on the dark web.
Download this whitepaper to learn about:
- Check fraud prevention efforts
- Dark web intelligence software
- Action items for suspicious check activity
Take a look at the other check fraud resources from Abrigo
- Whitepaper – Check fraud: New tech driving old school scam
- Webinar – Proactive measures to fight against check fraud and fraud loss
Check fraud is continuing to surge. While check fraud has been around since the first checks were used hundreds of years ago, the internet and social platforms have made it easier to access and find buyers for stolen checks ever since. Preventing check fraud at a financial institution begins with frontline staff training and extends to using check fraud detection software. Understand the red flags indicating a check has been tampered with and the warning signs that customers have fallen for a scam. Stay up to date with check fraud trends to bolster security and safeguard the financial institution and its customers or members.
Download this whitepaper to learn:
- The prevalence of check fraud in the digital age
- The methods used to procure and cash stolen checks
- Organization- and staff-level measures to address check fraud
Check out other banking cybersecurity resources:
Industry insiders review common risk factors
Every year, thousands of contractors face bankruptcy and business failure, whether in business for two years or 20. These firms leave behind unfinished private and public construction projects—and billions of dollars in losses that fall to project owners and taxpayers. In this whitepaper, learn what industry insiders see as the four main causes of contractor failure.
You will learn:
- The causes of contractor failure
- How to manage the construction risk
- Dos and don’ts to help contractors avoid default