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Success with automating loan administration – beyond time savings, eliminating institutional risk

April 22, 2014
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The value of automating your loan administration process extends beyond process efficiencies, and can even have lasting impacts by improving institutional risk management. With automated exception tracking and notifications when loans reach exception status, an organization can implement a new institutional standard for completeness and timeliness of records associated with outstanding loans. 

A central loan admin system also equips the bank to proactively identify problem loans by equipping senior management with the resources to know what tickers are outstanding, which loan officer is responsible, how long it has been an exception and how it affects the loan portfolio. Altogether this removes surprises at exam-time and makes audit and exam preparation as easy as running a report. 

“Reducing overall loan portfolio risk can be achieved by implementing a strong, post-funding loan analysis program, which requires a strong document and technical exception tracking system,” according to Welsh, a former senior lender with over 20 years’ experience making loans and managing loan portfolios. Welsh continues, “In my experience managing loan portfolios and auditing banks, automating where it makes sense usually provides significant benefit toward this goal.”

As more institutions proactively identify and respond to credit-quality deterioration, the notifications from a centralized loan administration system become an invaluable tool for staying on top of loan-portfolio health.

By identifying and monitoring which clients tend to cause exceptions, financial institutions can also update risk ratings, which increases accuracy in stress tests, migration analysis and concentration reporting. This arms management with near real-time data on the portfolio and better equips them to determine risk appetites, lending strategy and capital adequacy.

Notifications from an automated system also enable loan officers to proactively reach out to borrowers to mitigate problems and determine if they need loan assistance or restructuring. By improving and automating loan administration, institutions can simultaneously improve the quality of the loan portfolio while reinforcing a commitment to customer success. 

To learn more about the benefits of automating your portfolio management process, download the whitepaper on Success with Automating Loan Administration.

About the Author


Raleigh, N.C.-based Sageworks, a leading provider of lending, credit risk, and portfolio risk software that enables banks and credit unions to efficiently grow and improve the borrower experience, was founded in 1998. Using its platform, Sageworks analyzed over 11.5 million loans, aggregated the corresponding loan data, and created the largest

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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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