5 Reasons to Transform Your Commercial Lending Business

Apr 25, 2023 4:41:07 PM commercial lending banking technology

Posted By: Dean Snyder

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There’s a lot of discussion around the need for banks to transform the way they approach and manage their commercial lending line of business in order to compete and stay ahead of not only traditional competition, but the new breed of fintech and non-bank, specialty lenders. Winning banks will need to evolve beyond legacy, manual “batch” systems to a digital, enterprise-wide approach to commercial lending management in order to provide the real-time, on-demand experience today’s customer’s demand and to succeed in today’s market. But why? What, exactly, does transforming your current “business and technology as usual” method into an enterprise-wide, straight-through processing, real-time approach do for your institution? Why go through the pain of adopting the “new?”

5 Reasons Why Transformation is Necessary

1. We live in a 24/7 world. Customers are used to getting what they want, when they want it, from wherever they are. And the longer a customer has to wait to get an answer, the less likely they are to return to that service provider. Replacing a patchwork of traditional, batch systems that may take days to process a request to a fully mobile and digital one that provides real-time answers on demand means the difference between making a lucrative deal, or having the customer take it to a competitor.

2. You want all of your revenue. Slow closing times, unclaimed fees, and missed renewals are all too common when you have 4, 5, or more legacy systems patched together. By consolidating to one platform that offers straight-through processing for your entire commercial lending portfolio, you’ll have a holistic view of all of the information you need to speed the time-to-decision, charge all fees, and work on renewals before the opportunity has passed.

3. Efficiency leads to more time with customers. The efficiency gains that come from a digital, straight-through processing platform are one of the leading reasons to “buy-in” to transforming. Replacing intensely manual and inconsistent systems with a solution that offers “once and done” data entry, as well as detailed reporting capabilities to monitor performance throughout the entire lending lifecycle, means managing resources more effectively. And that gives your relationship managers more time with customers.

4. Data is king. Today’s successful banks don't manage totally by process; they also manage by data. Trust in your data quality provides you the agility to work with your customer, and the customer to have faith in your data and process. By having accurate, 24/7-accessible credit lifecycle data provided by a single, straight-through processing platform, you’ll be able to manage any exception in real-time, and know immediately if there’s any problem and react, from anywhere at any time. You’ll also have the data and reporting you need to make better business decisions on where to invest, and where no to, based on information you can feel confident is 100% accurate across your portfolio.

5. Regulators are still watching. Even as current regulations are under scrutiny, they are still in effect, and regulators are still demanding detailed reporting from financial institutions. In short, regulatory pressure is still very much present, and the best way to handle that pressure it to have a system that provides the highest level of data integrity combined with ease of reporting on that data – neither of which manual, “batch” systems provide. With a single platform and real-time, straight-through processing, you know your data is accurate, timely, and always accessible.

Transformation is No Longer an Option
Customers seeking commercial loans want to work with lenders that are fast, accessible, transparent, and easy. In fact, ease of doing business is paramount in whether a customer chooses you or someone else to service their lending needs. Doing things “the way it’s always been done” isn’t going to work anymore, not when other institutions, fintechs, and non-traditional lenders are already adopting a digital, straight-through processing, real-time approach to commercial lending. They understand that technological transformation translates into relationship capital, which then translates into more revenue and growth. Many are getting better at focusing on clients and delivering the experience they demand, which sets the competition bar higher and higher. Savvy banks now know that “the way things have always been” is no longer a viable roadmap to the future, and are to adopting an approach of transformation to deliver the mobile, digital, “anytime anywhere” experience required to keep, and attract, customers.