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Lending & Credit Risk Loan Origination System

How Frandsen Bank & Trust Achieved 100% Adoption of its Technology Investment

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Many financial institutions are looking for technologies that allow them to operate more efficiently and effectively. However, most institutions become frustrated when they don’t see the full value of their investment due to poor adoption and buy-in. 

Frandsen Bank & Trust, a Minnesota-based institution, isn’t like most institutions. 

The bank achieved full adoption of its technology investment, resulting in significant cost savings and efficiencies. Much of this success can be attributed to the fact that it implemented a successful strategy to ensure technology usage and adoption across all departments and branches. 

Identifying the Problem and
Setting Expectations

Lenders at Frandsen Bank & Trust were growing frustrated the bank’s cumbersome commercial lending process. One reason for the unwieldy process was multiple disparate systems. Frandsen used two separate systems for spreading loans – one for commercial and one for ag. It had a different loan documentation system, used both Excel and Word files for tracking documents and maintaining checklists, and accessed its core system at various points in the lending process. Of course, none of these systems “talked” to each other, which meant staff taking time to move in and out of each system to access or record data. The team knew that the process could be smoother with fewer steps, and they began seeking out potential solutions. To get better clarity on how to improve its commercial and ag lending processes, Frandsen enlisted the help of an outside consulting team. Among the consulting group’s recommendations for the bank, the advisors strongly encouraged Frandsen to move to an online commercial loan origination system, and they provided Frandsen with a list of recommended vendors. 

After narrowing down the list of vendors, Frandsen assembled a selection committee with employees from all aspects of the lending process, including lenders, lending associates, credit analysts, and approvers. Having representation of each group made the team members feel heard and fostered significant buy-in. This team unanimously selected Abrigo based on its ease of use and value. 

“I feel that representation was really important, so each group had input,” said Rich Hoban, Director of Corporate Development at Frandsen Bank & Trust. “I think we got better buy-in because of that.”

The management team at Frandsen set clear expectations for the software and its lending team, regularly communicating these goals from the start of the process. One of the top priorities during software implementation was to get complete user adoption. To ensure this was achieved, Frandsen communicated to the lending team that it would be mandatory to put all commercial and ag loans through the Abrigo system once all branches were trained.  

“For us to optimize the efficiency of the system, we really had to make things consistent and make sure we had all of our commercial and ag loans going through Abrigo,” Hoban said. “We explained to everyone that we would phase our way through it, but we were really clear all along that we would be committed to using the system. It’s important that we are adaptive.” 

Change is hard for everybody, but if you can explain why change has to occur and how that change can eventually benefit the group overall, it may not be easy, but it becomes easier.
Rich Hoban, Director of Corporate Development

Generating Buy-in and
Selecting ‘Power Users’

Once the bank established the vision and expectations, Frandsen assembled a project team to develop deep expertise in the software and build support for the new technology throughout the institution. Experts say this is a crucial step in a successful technology implementation.  The bank created its implementation team as it did its initial selection committee, again ensuring that each department involved in the process had a representative. It also selected Josh Jansen, a Credit Analyst at Frandsen, to be the project manager for the Abrigo implementation, and he became the chief advocate of the solution. Jansen also had experience as a Lender at Frandsen.

His expertise in multiple areas of the lending process made him a particularly strong candidate to lead the project. Hoban recognized that there are always pockets of resistance when it comes to implementing new processes, but he noted the importance of having a strong, enthusiastic project manager that can help instill confidence in the other end users.

Jansen customized Abrigo’s best-practice templates to incorporate Frandsen’s specific policies and needs. “He dove in and really learned the guts of the system,” Hoban said. “When you’ve got that expert on staff, and you know you can get a quick response if you run into a dead-end, that relaxes everybody, and everyone performs better when the stress is low.”

Abrigo also paired up Frandsen Bank & Trust in contact with another customer bank to ease the transition. As it built out modules and rolled out changes, Frandsen was able to get advice from the peer institution on best practices and bounce ideas off them when they ran into any issues. 

“It was nice to be able to ask, ‘Did you encounter this problem?’ and ‘How did you handle this problem?’” Hoban said. “It was nice to work with another bank that could be a sounding board for us.”

Frandsen Bank & Trust took a hub-and-spoke approach to its implementation strategy. Jansen worked with the assembled team of associates to test Abrigo’s lending software at pilot branches, which became “power users” that would later train other offices. This strategy developed the internal knowledge sources prior to fully rolling out the system to all users. The associates began practicing in the system with smaller loans of $300,000 or less to get started.

Then, the associates worked on running larger, more complex loans through the system. After assessing the process, providing feedback, and adjusting the system, the associates then began working with all 36 branches to fully train and be comfortable with the system by their mandatory usage date.   

"I feel that representation was really important, so each group had input. I think we got better buy-in because of that."

Rich Hoban, Director of Corporate Development

Accepting Change and
Seeing the Big Picture

New software can help financial institutions tremendously, but it isn’t a silver bullet. To realize the full value of the investment, it requires significant dedication and commitment from the end users. When Hoban or other management team members faced pushback or resistance to the new system, they were able to point to specific sticking points and challenges the advisors and other lenders had identified prior to implementation, and they could address how the Abrigo system alleviated those challenges. 

“Change is hard for everybody, but if you can explain why change has to occur and how that change can eventually benefit the group overall, it may not be easy, but it becomes easier,” Hoban explained.

Frandsen Bank & Trust recognized the importance of having an automated lending solution to create efficiencies for its staff and allow them to work more quickly. It also understood the importance of scaling for growth. An active acquirer of other banks, the bank has been growing quickly in recent years. 

“When we compared our numbers compared to peers, we knew we were fairly inefficient with our lending area from a cost standpoint. If you’re a growing bank, then you have to be adaptive,” Hoban explained.
“Abrigo allowed us to do that by having a system that could be leveraged by a fewer number of lending associates.” Leveraging employees more effectively with technology means financial institutions can do more without having to add staff.

When Frandsen Bank & Trust brings on new employees through acquisitions, it expects them to use the Abrigo lending system. With Abrigo, all deals are tracked inside of Abrigo, eliminating the need to use outside systems. Keeping an open mind and an open line of communication has been important to help these new employees adjust to it.

“Moving away from old methods doesn’t mean that the old method was wrong or bad, but just different. Any time you’re implementing a new system or creating any type of new change, you’ve got to be communicative and be open to feedback.”

At this point, Frandsen Bank & Trust is putting all commercial and ag loans through the Abrigo lending system. While there are loans that must occasionally be completed outside of the Abrigo process, the bank has achieved 100% buy-in for the system. Frandsen carefully tracks their loans to make sure no offices or lenders abuse the ability to complete a loan outside of the Abrigo system occasionally, and Hoban says, “we haven’t really had any problems with it.” 

Because of Frandsen Bank & Trust’s clear communication and expectations to staff, openness to feedback, and commitment to its goals, it has successfully adopted a new technology and seen a significant return on its investment.