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4 Ways to evaluate your loan review department’s effectiveness

Kent Kirby
Jim Xander
Kate Randazzo
October 10, 2023
Read Time: 0 min

Loan review issues include staffing challenges and training.

Last year's 2022 Loan Review Survey by Abrigo found these four common challenges in effective loan review. 

Review the 2023 Loan Review Survey results with experts and get their take on emerging trends and best practices

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Concerns around credit quality are on the rise as financial institutions across the country look to understand how work from home, high inflation, and rapidly increasing interest rates have impacted the portfolio. A key component of understanding and reacting to these concerns is the loan review function. Acting as the last line of defense, it is crucial to have an effective process in place.   

For over a decade, DiCOM Software, now Abrigo, has surveyed loan review professionals to uncover challenges they often face. Recent trends highlight four critical areas that banks and credit unions can evaluate to gauge the efficiency of their loan review departments: staffing, collaboration practices, job responsibilities, and talent development. Examining these areas is a good starting point for your financial institution to optimize its processes and maximize existing resources. 

The right people

Staffing challenges in loan review departments

Recruiting and onboarding skilled loan review staff can be a difficult task, but staff are a vital part of effective loan review. Many organizations encounter difficulty in attracting and retaining new members on their loan review teams. The gradual exit of long-serving senior-level employees compounds this challenge. Most loan review departments are heavily reliant on staff with 10 or more years of experience, as shown in this graph from the 2022 Loan Review Survey. 


average staff experience


Abrigo’s 2022 survey also revealed that while most banks with assets over $1 billion rely on internal resources for loan review, about 35% of banks seek support from external third parties.



Increased workload and a talent shortage emerge as the top reasons prompting banks to look beyond their organization. While not a solution for the talent shortage, automation can optimize processes, often at a fraction of the cost of additional resources. Leveraging loan review softwarecan help financial institutions maximize their existing resources. 

Loan review software offers the following benefits: 

  • Streamlining manual efforts, allowing staff to focus on high-value tasks
  • Enhancing review consistency, reducing process waste
  • Facilitating smoother interactions between team members and departments
  • Providing cost savings compared to additional resources or outsourcing
  • Enabling more accurate assessment of resource needs

Many banks and credit unions find that booking loans with a loan origination platform offers their current staff greater functionality, mitigating or eliminating those staffing woes.  For smaller institutions especially, software makes tracking productivity among teams, geographies, and other factors easier and more efficient. In addition to providing a more efficient credit risk review, a loan review solution can provide other analytics to support staffing requests. 

Permanently remote

Collaboration: Maximizing remote work

The 2022 Loan Review Survey found that approximately 78% of loan review staff work remotely, either partially or entirely. While some financial institutions had already embraced remote options, many implemented emergency work-from-home policies during the pandemic, necessitating adjustments in loan review departments' operations. Furthermore, most banks anticipated a permanent shift towards remote work, compelling them to refine processes and technology to support this transition. 


Some loan review software offers a transparent loan review process tailored for remote work environments. With a centralized platform for managing tasks, tracking progress becomes intuitive. Abrigo’s DiCOM loan review software is a reliable source of progress updates, simplifying the process for team members and reviewers. Customizable workflows and collaboration features further enhance efficiency. 

Many hats

Changing job responsibilities in loan review departments

Loan review departments often handle additional responsibilities beyond standard exam-based reviews. These can vary widely by institution, with acquisition due diligence a common task. Please see the graph below from the 2021 Loan Review Survey for reference. The survey found that many organizations seek a more efficient way to manage the due diligence process, as it can significantly impact team productivity and internal portfolio coverage. Efficiently managing this process is crucial, as it can dramatically impact team productivity and portfolio coverage. 

 Abrigo loan review software provides a solution to optimize due diligence processes, paralleling its benefits in internal reviews. The system supports automated data import or offers a manual option, enabling seamless data transfer for effective due diligence. A tailored review workflow and questionnaire further enhance efficiency. 

Learning opportunities

Talent development, training, and education

Investing in talent development is vital for ensuring the strength of your institution's loan review function. Proper training and education yield dividends in terms of early issue detection, ultimately saving costs in the long run. Additionally, retaining well-trained employees is essential. Internal growth potential can be a powerful motivator for team members. 

Considerations for staffing the loan review function include education, diverse experience, familiarity with loan types, understanding of review processes, knowledge of credit policy, and esteem within the organization. New staff with all of these qualifications can be hard to come by, but turning junior members into the experienced professionals your institution needs can only be accomplished through adequate training.  



Identify and strengthen weak links for effective loan review

The loan review process is a linchpin for the overall health of a bank or credit union. Addressing common weaknesses in loan review departments can significantly enhance their effectiveness, ensuring safety and soundness in financial institutions. For more trends and statistics regarding loan review staffing, processes, and training, register for our upcoming webinar where we will break down the 12th annual loan review benchmark survey results.  

Stay up to date on loan review best practices.

About the Authors

Kent Kirby

Director, Advisory Services
Kent Kirby is a retired banker with 39 years of experience in all aspects of commercial banking: lending, loan review, back-room operations, portfolio management, portfolio analytics and credit policy.  As Director, Kirby assists institutions in the creation, review and/or enhancement of current credit policies, risk rating systems and loan review

Full Bio

Jim Xander

Account Executive, Loan Review
Jim Xander has over 20 years of leadership experience within various industries leveraging strategic market information to develop and enhance software platforms designed to optimize key business process.  For the last six years, he has managed the DiCOM Annual Loan Review Survey and other thought leadership initiatives to support the optimization

Full Bio

Kate Randazzo

Content Marketing Manager
Kate Randazzo is a Content Marketing Manager at Abrigo, where she works with industry thought leaders to create digital content that helps financial institutions better serve their customers. Before joining Abrigo, Kate managed social media and produced articles for Campbell University’s quarterly magazine and other university content initiatives. She earned

Full Bio

About Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo's platform centralizes the institution's data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth.

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