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The pros of loan spreading software

October 18, 2018
Read Time: 0 min

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:

  1.    Increasing transparency into the portfolio
  2.    Working efficiently on occupational tasks
  3.    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.

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Organize tasks efficiently

Everyone knows how it feels to find certain tasks slipping down their to-do lists for days at a time. Simple, daily task management can be elusive when low-priority tasks control most of the workday. The time-consuming task of data entry often bottlenecks other time-sensitive tasks and prevents banking professionals from dedicating work hours on duties that will more directly affect the bottom line. Streamlining the data entry process with automation enables credit analysts to efficiently allocate time on more complex credits, and lenders can focus efforts on winning the next borrower.

Deliver personalized service – Gain easier access to accurate data

Banks and credit unions that deliver a personalized digital experience can drive customer satisfaction and loyalty. But gaining a 360-degree view of the borrower is impossible without the proper data to understand borrowers’ preferences. Personalizing the borrower experience takes effort and one-on-one personal time with the lender, but inaccurate data entry can often hinder the lending process.

Your borrowers expect a unique experience, and as alternative lenders and technology giants – such as Amazon – offer more tailored approaches to banking than traditional banks and credit unions, superior customer service is a must. Data entry automation lessens the potential for the human element of error during credit analysis. Accuracy during credit analysis not only leads to quicker loan decisioning and the best loan pricing scenario for both the borrower and the institution, but it also increases trust and commitment from the borrower. Community banks and credit unions that deliver quick results and quality customer service, win loyal borrowers in return.

Everyone is honing into their customers’ data, but it’s important that financial institutions note that it’s the right data that leads to the correct insights – quality over quantity. Loan spreading software both streamlines the data entry process and grants decision makers the opportunities to maximize time-savings, win more loans and build a more defensible loan portfolio based on accurate data points.

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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