Achieving Efficiency Through Automated Decisioning
Need for Increased Lending Efficiency “We all struggle to make money on the lending side” “Many banks are losing money with every small business loan they make.” “Credit unions are currently struggling to attract small business owners because they are having trouble gaining faster processing times…” “Technology is rapidly changing the lending industry with the emergence of new online lenders.”
“You have to figure out a way to make a $100,000 loan make economic sense” “Small business loans are often as nearly as complicated for banks to complete as large loans, with less return.”
1
Tallying Up the Cost…
• High origination costs and increased processing and infrastructure requirements
• Compliance and regulatory issues that have hiked the cost of small business lending
• Ongoing monitoring costs have also risen due to privacy concerns and enhanced reporting requirements
2
The Bottom Line: $100,000.00 Loan Origination Costs = $1,000 -‐ $1,500 Underwriting = $1,000 Loan Review= $100 Operations =$250 Monitoring & Collections= $500 Compliance= $250 -‐ $350 Total = $3,100 -‐$3,700
6.25% Interest Rate 3.0% Charged to the Business Unit
-‐$450 to $250
3
Improving the Bottom Line
• Evaluate the profitability of Small Business Lending as a whole • Increase cross sales • Process improvement • Outsource or partner on lending 4
Port City Coffee & Christa Shelton Port City Coffee $100,000.00 needed to open a 2nd small location Business Delinquency Score: 205 Risk Rating: 4 First Location = Very Successful Debt Service Coverage: 1.75% Christa Shelton Credit Score: 816 Risk Rating: 4 Debt Service Coverage: 1.25%
Demo 5
Customer Configured Logic
Customers maintain their own credit policy and decisioning model without leaving the nCino Bank Operating System platform.
Demo
6
Benefits
Consistency
Compliance
Efficiency
Processing Time
7
Loan Auto Decisioning-‐ Early Adopters Program Joy Kafka & Jonathan Russell Fairwinds Credit Union Mike Zoretich-‐ PWC
Automation Across other FI Aspects
9
Achieving Efficiency Through Automated Decisioning
Questions, Comments, Interest? Visit the Community Lounge!
“You have to figure out a way to make a $100,000 loan make economic sense” “Small business loans are often as nearly as complicated for banks to complete as large loans, with less return.”
1
Tallying Up the Cost…
• High origination costs and increased processing and infrastructure requirements
• Compliance and regulatory issues that have hiked the cost of small business lending
• Ongoing monitoring costs have also risen due to privacy concerns and enhanced reporting requirements
2
The Bottom Line: $100,000.00 Loan Origination Costs = $1,000 -‐ $1,500 Underwriting = $1,000 Loan Review= $100 Operations =$250 Monitoring & Collections= $500 Compliance= $250 -‐ $350 Total = $3,100 -‐$3,700
6.25% Interest Rate 3.0% Charged to the Business Unit
-‐$450 to $250
3
Improving the Bottom Line
• Evaluate the profitability of Small Business Lending as a whole • Increase cross sales • Process improvement • Outsource or partner on lending 4
Port City Coffee & Christa Shelton Port City Coffee $100,000.00 needed to open a 2nd small location Business Delinquency Score: 205 Risk Rating: 4 First Location = Very Successful Debt Service Coverage: 1.75% Christa Shelton Credit Score: 816 Risk Rating: 4 Debt Service Coverage: 1.25%
Demo 5
Customer Configured Logic
Customers maintain their own credit policy and decisioning model without leaving the nCino Bank Operating System platform.
Demo
6
Benefits
Consistency
Compliance
Efficiency
Processing Time
7
Loan Auto Decisioning-‐ Early Adopters Program Joy Kafka & Jonathan Russell Fairwinds Credit Union Mike Zoretich-‐ PWC
Automation Across other FI Aspects
9
Achieving Efficiency Through Automated Decisioning
Questions, Comments, Interest? Visit the Community Lounge!
