Integral to the core AFS lending solution is its unique straight-through process (STP) from origination to decisioning, closing, booking, servicing, recovery, reporting, and capital markets distribution, including the delivery of management information.
The following examples show our commitment to successfully helping clients gain competitive advantage, enjoy a low-risk but high-return speed to market, and boost profitability.
US$12 billion Upper-Midwest Financial Institution
The Problem: In 2010, this thrift acquired a commercial bank charter and raised capital to enable it to transform itself from primarily a mortgage lender to a commercial bank. The Bank acquired a new management team who had worked with AFS previously and who knew that AFS could help them meet its goals.
What AFS Did: In five months, a new lending platform was implemented. Using its knowledge of Best Practices, AFS assisted in defining the Bank’s products, workflows, operational support groups and policies, in addition to implementing the system.
The Result: Initially focused on fulfilling the credit needs of small businesses utilizing an extensive branch network, the Bank has since begun offering more complex commercial and commercial real estate loans on the same platform.
US$77 billion Northeastern Financial Institution
The Problem: This former thrift (approximately 250 branches) acquired US$4 billion in commercial loan assets from a large Northeast institution in 2001. With no infrastructure in place to support the new portfolio, the Bank turned to AFS for support.
What AFS did: Within 90 days, AFS developed the operating model, established an application support and loan operations service, and managed the conversion, training, procedures development and computing services for this organization.
The Result: The Bank is still a client of AFS today, and has grown the commercial loan business to US$25 billion in assets through various acquisitions (managed by AFS) and organic growth.
US$9.2 billion Southeastern Financial Institution
The Problem: This Financial Services firm’s subsidiary had been successful in executing a successful and deliberate loan growth strategy, leveraging the relationships with its financial services clients as well as with other banks as part of syndicated/participated deals. The loan portfolio grew to a level of complexity that could no longer be supported on its previous system.
What AFS Did: As a result, the Bank evaluated and implemented AFS on an outsourcing basis to handle this burgeoning business.
The Result: This client bank is now well-positioned for acquisitions from both a structural and a competitive basis. It has since embarked on several M&A initiatives.
The following client success stories illustrate the advantages of the AFSXpress suite, especially when integrated seamlessly with the AFS Level III Loan Accounting System for true straight-through processing.
Bank has an asset base of US$170 billion and enjoys its reputation as one of the largest and strongest financial institutions in the U.S.
The Problem: In an effort to improve, Client One Bank identified a number of realities that needed addressing, namely:
- Compliance concerns: Client One Bank wanted to solve for data integrity and greater reporting strength, while eliminating inconsistencies across the organization. Specifically, documentation was targeted for improvement in the credit file, policy exceptions, and the overall credit process.
- The ease (or lack of ease) with which customers transacted business with Client One Bank: Structurally, Client One Bank found itself managing, tracking, and correcting five points of data entry in the loan system. The processes within the credit delivery model were manual and paper-based. Organization-wide, this led to regional inconsistencies and translated to increased credit and regulatory administrative activities (and their associated risks and costs).
- Lack of an ability to optimize the credit process and eliminate inefficiencies: Client One Bank supported 17 distributed and commercial support units, each managed along separate lines of business. Deal paths diverged based on segmentation and size, and RM productivity was low.
What AFS Did: AFS helped Client One Bank implement a strategic solution-based approach based on AFS functionality for credit administration, origination/workflow, and KPI reporting. The 17 commercial support units were consolidated under defined roles and responsibilities. AFS helped Client One Bank establish core credit and approval requirements and brought control to the credit file.
The Result: Owing to the capabilities within the AFSXpress suite of products to use straight-through processing to bring efficiency and cost containment to lending, Client One Bank can now originate its loans quicker and with less expense. Further, it is able to monitor and control in relation to risk, providing for greater scrutiny in higher-risk deals and lesser scrutiny where it is warranted. Lines of responsibility are now clear within Client One Bank, and the resource-to-skill set alignment has improved. Perhaps most important, use of AFSXpress simplified the credit review functions, improved data quality and integrity, and boosting the bottom line.
Bank is one of the top 20 largest U.S. commercial banks and a subsidiary of international bank holding company. Its asset base is US$700 billion.
Client Two Bank was experiencing a number of operational inefficiencies, including those resulting from an over-reliance on manual processes:
- The loan origination process was overly paper-based, preventing the systemic storage of origination data, across the lines of business.
- The manual nature of the credit process meant no workflow control
- All exposure, customer, and officer data were entered by hand, prone to error, redundancy, and inefficiency
- Loan disbursements were also manual
This lack of data integrity had serious repercussions, among which was the manual aggregation of data for reporting, resulting from a lack of cohesion in the system of record for rating and pricing data.
What AFS Did: AFS deployed its AFSXpress suite at Client Bank Two, implementing a system of control for the loan origination process, with validated “once and done” data input. AFS then automated the booking process and provided integrated rating and pricing tools.
This moved Client Bank Two to a straight-through processing model that, once completed, provided integrated rating and pricing tools, as well as one system of record with “locked down” data for downstream reporting and calculations. Disbursements were automated via integration, as was the preparation of internal documents.
The effort was guided by the AFS Project Management Engagement Model, which used joint teams consisting of resources from AFS and Client Two Bank. The Engagement Model ensures collaboration at multiple levels to bring about the success of the project, from business and technical leads through executive management
The Result: Significant revenue and efficiency gains were realized, as verified by the Client Two Bank analysis of its ROI. The Bank now benefits from AFS risk-avoidance advantages such as systemic tie-in of exposure data, improved risk rating lineage, and improved capability for regulatory compliance.
AFS can bring similar results—and more—to your organization. Contact us to find out how.