Discovering insights from data can be the difference between a defensible loan portfolio and a vulnerable one for financial institutions. Yet, community banks and credit unions that cannot afford dedicated data entry specialists must rely on time-strapped lenders, credit analysts, or loan administrators to complete data entry during loan spreading, which can lead to error-ridden processes and inconsistent data points. For community institutions that are committed to building a defensible portfolio risk management system, it’s imperative to look for time-saving and cost-saving measures, such as automated data entry, to streamline loan spreading.
Data Entry is Costly
Data entry is one of the most important tasks during loan spreading. But data is only as reliable as the individual who keyed it in, and C-level executives have taken notice of data quality costs. Nearly 90 percent of executives believe that inaccurate data is undermining their ability to provide an excellent customer experience and 95 percent of executives are focusing on data as an integral part of forming the business strategy.
Despite the fact that incorrect data entry into spreading software can quickly lead to hundreds of incorrect data points, especially during the spreading of complex loans, many community banks don’t have the bandwidth or budget to increase staff size.
Poor data entry also steals valuable time from decision makers within financial institutions. When key players in the lending process must correct errors manually, it leads to an inconsistent and inefficient credit process. In fact, a report by Forrester states that nearly one-third of analysts spend over 40 percent of their work hours validating data before use during decision-making.
The good news is there is a solution: accurate loan spreading software. With an automated solution that imports information into a financial analysis spreadsheet program, financial professionals reduce the risk of human data entry errors and eliminate bottlenecks caused by incorrect data entry during underwriting or annual review. Loan spreading software offers banking professionals a helping hand by doing the heavy lifting as it pertains to data entry, allowing them to focus on more important tasks such as:
- Increasing transparency into the portfolio
- Working efficiently on occupational tasks
- Maximizing customer service efforts
Increase transparency into the portfolio:
When was the last time your credit analysts took a deep dive into the metrics that influence your institution’s success the most? If it’s been a lengthy period, it may be time to put on your analytics cap because it might improve your financial institution’s performance. In a recent study conducted by Deloitte, 83 percent of respondents stated access to quality data improved competitive positioning. Community banks and credit unions that choose an accurate loan spreading software gain access to quality reporting. Lenders and analysts can then focus on analyzing the data and gain invaluable insights into the areas that can be improved to increase portfolio defensibility.