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Electronic Tax Return Reader: Boost customer satisfaction and save time

July 11, 2018
Read Time: 0 min

Across all tasks involved with the commercial and personal lending processes, one common bottleneck that banks and credit unions face every day is data entry. Manual data entry is not only a time waster, but a money pit as well. Poor data quality in the form of inaccurate or simply questionable data costs the U.S. economy approximately $3.1 trillion a year, according to IBM. Minimizing data entry for your lenders and credit analysts allows these professionals to put a sharper focus on the borrower’s needs and the overall customer experience. Sageworks’ unique Electronic Tax Return Reader (ETRR) product allows financial institutions to spread financial statements in just minutes, permitting quicker loan decisions and a happy customer.

In order to predict a borrower’s ability to repay a loan, it’s vital that all underwriting is accurately entered into credit analysis systems. However, when the average commercial real estate (CRE) loan requires three years of returns from the business and three years of returns from each owner – data can be easily mistyped. Sageworks’ patented ETRR automatically imports data from tax returns and maps out the information into a spreading system that can be easily used for detailed credit analysis.

Reducing bottlenecks during underwriting or annual loan reviews will become increasingly important as banks work to develop strong relationships with younger borrowers — particularly millennials who expect speedy service and a digital customer experience. According to Deloitte, millennials are:

  1. Entering their prime earning years with a high entrepreneurial spirit and
  2. Characterized by financial dependence on parents and will benefit greatly from inheritances.

Millennials encompass the largest adult segment worldwide and recently overtook Generation X as the largest generation within the U.S. workforce, yet they’re making 20 percent less than baby boomers earned at the same age due to high loan debt and unemployment rates. As these young entrepreneurs begin applying for personal and commercial loans, lenders will become inundated with information from business owners and their guarantors. ETRR can be a game-changer for banks looking to reduce bottlenecks, be more efficient and improve the customer experience.

ETRR ensures data accuracy across the loan portfolio

ETRR is often compared to optical character recognition software (OCR) because each platform offers the ability to import data from tax returns. However, there is one major difference: accuracy. Considering some returns can be as long as 120 pages each, it’s important for lenders to be precise when entering data. OCR utilizes light-detecting photocells to recognize patterns of text in an image and translates it into numbers or letters, which is a flawed process. It’s common for OCR technology to misinterpret handwriting or fonts – such as misreading 8 for 9. Using an X-Y coordinate of the PDF, ETRR extracts information from tax returns produced by tax accounting software used by 85 percent of accountants, such as Drake© and ProSeries®. Sageworks’ ETRR gathers data from the original electronic PDF and extracts it from a computer-ready format, leaving little room for errors and guaranteeing accurate data across the portfolio.

Learn more about Sageworks’ award-winning Electronic Tax Return Reader.

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ETRR eliminates underwriting bottlenecks and shortens loan decisioning

Today both Generation X and millennials live in a world that demands quick solutions to everyday tasks. Whether it’s hailing a ride from A to B using Uber, paying for bills with the click of a button or applying for loans completely online, no time is wasted. The same expectation extends to the loan decisioning process. Borrowers expect a quick response rate and superb customer service – particularly millennials who are often described as impatient and needing instant gratification. When financial institutions can save more than 20 minutes per return using the ETRR and import whole returns in less than a minute, they are better able to meet those customer expectations. 

ETRR increases defensibility of risk management processes to examiners and auditors

According to IBM, 1 in 3 business leaders don’t trust the information they use to make decisions. With heightening banking regulations and accounting standards, such as the current expected credit loss (CECL) model, it’s never been more critical for financial institutions to understand their allowance for loan and lease losses (ALLL) calculations. Data entry plays an intricate role in data integrity and compliance with CECL standards, so it’s important to ensure all data is populated correctly. Sageworks’ ETRR is the best option to negate risk within the institution and cut down on the time commitment and near-certain errors associated with manual data entry.

Additional Resources
Whitepaper: Quantifying the 5 Cs: Credit Analysis Ratios that Matter
Webinar: The Cs of ‘Credit Guidelines’ for Tax Return Analysis

About Sageworks

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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