Is Your Bank or Credit Union Struggling with Inefficiencies?

A common problem countering workplace productivity and the ability to serve customers is inefficient processes. Many of these are inherited and accepted as “just the way we do things.” But in order to work smarter, not harder, and provide a good experience for customers, inefficiencies should be challenged in favor of fresh ideas and processes.

Across the banking industry, a current strategic focus is loan growth – increasing the portfolio by both acquiring new customers and expanding services offered to existing customers. Particularly for community banks and credit unions, many of which find themselves in a very competitive environment, growing a loan portfolio can be challenging. To win prospective loans, regardless of whether it is a new or existing borrower, an institution has to respond with efficiency in order to get back to the prospective borrower with the same speed as competing financial institutions. With the proper implementation of a workflow management system, a bank or credit union can identify and resolve points of inefficiency that might otherwise impede growth objectives.

Inefficiency in the loan portfolio could take the form of:

• Duplicate data entry, where staff have to enter the same data into multiple systems
• Returning to the customer multiple times to collect all the necessary documents
• Storing documents in disparate systems so it’s unclear what information has and hasn’t been collected
• With multiple people working on a single loan, it can be difficult to know at what stage the loan is at, forcing the parties to provide frequent status updates
• An analyst has to re-spread the financials for a customer when new information is collected
• Manually aggregating data needed for loan committee presentations
• Manually adjusting loan proposals if the loan committee recommends changes

Any of these inefficiencies can keep a financial institution from acquiring qualified new customers and can substantially slow growth. A workflow management system helps a bank or credit union address any or all of these inefficiencies by defining, executing, managing and modifying current processes related to specific strategic business objectives. It can eliminate redundant tasks and ensure that uncompleted tasks are followed up on in a timely manner.

Specifically, in the context of loan-portfolio growth, a primary objective is managing the entire lifetime of the loan process, starting at discovery or business development through potential impairment and risk management. An automated workflow management system that covers lending processes can provide access to real-time, comprehensive information on the status of loans in the pipeline, trailing loan documents, periodic loan reviews, watch-list credits, the impact of stress scenarios on loans, and impairment status with the resulting provision.

While a workflow can be tailored to suit any process within a bank or credit union, particular applications of a workflow management solution within the lending department can yield efficiency gains, visibility into the process, documentation that will be ready for examiners and a consistent adherence to the institution’s best practices – ultimately a better, more consistent experience for the customers served by the institution. Specifically, workflows can help a credit union overcome challenges with origination, tracking documents after closing and servicing the loan through annual reviews.

Regardless of the type of solution implemented, workflow management systems can uncover and prevent holes in the lending process. These systems also tend to unify employees with diverse skills into a more cohesive unit, while building in a layer of awareness and appreciation for the full life of the loan. With an efficient system in place, an institution can be better positioned to meet portfolio growth objectives.