7 Strategies for Achieving Balanced Loan Growth – Parts 3 & 4

7 Strategies for Balanced Loan Growth – Parts 3 & 4

On our blog, we’ve been covering different strategies for balanced loan growth. Today, we’re going to give you parts three and four in one!

If you need to, you can find part one and part two to get caught up. 

Strategy Number Three - Deal Pricing 

To further understand the relationship and optimize for growth, banks and credit unions must invest in a banking solution that increases the ease of origination.  They must tighten their LOS by reducing time-consuming processes and improving the overall consistency, while also mitigating risk and supporting regulatory compliance. Lending software should also serve the needs of both business and consumer lenders in a mobile-responsive architecture.

Strategy Number Four - Efficient Loan Origination

The ability to leverage CRM, core, application, pricing, and additional third-party data sources all in one loan origination platform will help ensure that loan decisions are consistent. Also, efficient institutions will see the benefit of linking the ties between their small business and commercial lending clients.  As we see those small businesses grow and develop their relationship, it is critical that their historical insights help nurture a profitable future commercial relationship.

Commercial Lending

Within corporate lending, banks must empower their commercial relationship managers to grow client wallet share by meeting the more complex commercial clients’ needs. To do so, a commercial loan origination solution should help address all commercial lending needs in a single, integrated platform that allows the institution to: 

Manage the entire commercial lending process 

Financial institutions must have a solution that provides a framework to automate, integrate and streamline commercial lending. An integrated platform should also address all commercial needs by finding all the different types of commercial loans and addressing their unique needs, while at the same time providing consistency. 

Improve regulatory compliance & mitigate risk

Financial institutions must also stay on top of changes in clients’ abilities to meet obligations. With aggregate exposure information and deposit data, they can gain a complete view of each client. As a result, they maintain insight into relationships with the bank, along with existing and potential exposure. 

Grow and develop client relationships

Strategic sales planning and service integration across lines of business to nurture relationships with clients should be encouraged. There should be a single point of entry for prospects and clients, and relationships must be grouped to understand exposure concerns. 

Drive underwriting efficiency

Institutions should be able to create the most efficient decisioning process. For instance, an optimized credit approval process should leverage workflow automation and business rules. Ultimately, a single platform greatly improves efficiency.

Consumer & Small Business Lending

Banks and credit unions must also streamline their consumer and small business lending process. On the business lending side of the equation, institutions must tap solutions that enable them to manage business credit requests of all sizes with greater speed and consistency. By facilitating consistency and effectiveness in the lending process, they will minimize portfolio risk and be more responsive to clients’ needs, as well as other benefits, including:  

Effortless operations

An effective solution empowers institutions to process applications, easily track the effectiveness of the process and generate reports anywhere with an Internet connection. Web-based accessibility generates reports anywhere but should also process applications safely through a highly secure processing environment. 

Analysis based on credit policies

Small business and consumer lending should support multiple decision strategies and processes for business applications, including scored or non-scored/judgmental and auto-decision, auto-decision with manual review, and always manual review.   

Integrated financial statement analysis 

Institutions will gain the data needed to have a complete view of every applicant so they can make quality lending decisions. For small business lending specifically, it should aggregate personal and business financial history and use relevant data as part of the underwriting process. 

Expedited loan applications

Financial institutions can automate and speed up the application process by prefilling loan applications with applicant information. This decreases the amount of data entry and training required and reduces the potential for errors. 

Specific to the consumer side, institutions must process loan applications more efficiently and at competitive rates – all while controlling credit risk – with a solution that conforms to their policies, mitigates credit risk, and ensures compliance. In consolidating lending application processes, institutions must look for:

Automated solution

Like commercial and small business, banks and credit unions must automate the entire lending application process from submission to booking and reporting. They must be able to process and decision direct loans, revolving lines, and home equity loans securely and efficiently. 

Full range of credit reporting company scores

To assess credit risk, an advanced full range of credit reporting company scores via single or tri-merge reports, along with credit policy rules, must be leveraged. Banks and credit unions should evaluate credit application and credit reporting agency data through an included option that leverages Fair Isaac® Application Risk Models®.

Single point of origination

All loan origination solutions must share a common database, simplifying implementation and improving user acceptance. This enables the sharing of applicant information and combined reporting and analysis of performance and pipeline.

Stay tuned for the next installment in this series. If you’d like to learn more now, download our full eBook with all seven lending strategies.