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What is digital transformation?

You’ve probably heard the term “digital transformation”, but what exactly does it mean? According to The Enterprisers Project (a community for CIOs and IT leaders), “Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers.”1

Competition from fintechs involves digital technologies

In recent years, business lending was the second highest category for fintech funding after consumer lending.2

Digital transformation is typically associated with retail banking, but it’s just as critical for commercial lending. New client expectations, increased competition from fintechs, and the growing availability of digital technology solutions provide compelling reasons for digitizing key components of this process-intensive business. Whether it’s to raise productivity, reduce errors or enhance customer relationship management, digital transformation enables a commercial lending business to re-imagine how its work and business processes are accomplished and create added value for clients, employees, and the entire institution.

Benefits of digital transformation for commercial lenders

To address rising client expectations and increased competition, commercial lending departments can leverage the benefits of digital transformation with a digital transformation strategy that incorporates business innovation. These benefits include:

Help prevent client fallout. Today, too much time (30-40% of lending resources’ time3) is spent on non-essential and automatable tasks, including manual, paper-intensive processes. Redundant business processes across job functions (e.g., loan officers, credit analysts and underwriters) contribute to the problem. When these result in a prolonged loan decision, clients may be motivated to seek credit elsewhere. That’s why a digital transformation strategy, along with adopting digital technology, is so important for today’s business lenders.

Meet rising client expectations. New expectations for frictionless transactions have already been established for retail consumers. Without deploying innovative digital technology and relying on legacy systems, commercial lenders will be less able to provide a similarly differentiated experience. This is especially important for Millennial prospects and clients, who are now the largest generation in the U.S. workforce.4 As enthusiastic beneficiaries of the digital age, that audience may be especially willing to seek a better experience elsewhere.

Work smarter, enhance accountability. By automating time-consuming tasks and existing processes, financial institutions are able to work smarter and faster. For example, with digital transformation initiatives they can eliminate much manual data entry with software that integrates with the core and Customer Relationship Management (CRM) systems. Banks and credit unions will also benefit from consistency and repeatability which means having things look the same and using locked-in, repeatable business processes. And by adopting digital technology and automatically capturing audit logs and approval history, they’ll enhance their accountability and reporting plus increase efficiency for auditors, compliance officers, portfolio managers and examiners.

Getting started with your digital transformation initiatives

Digital transformation is not an all or nothing proposition. Depending on your business needs and priorities, you can begin by focusing on the business process or processes that are  most meaningful for your financial institution.

Would you like to gain efficiencies and insights for your origination process? Then you may want to start with loan pipeline management, which gives you a snapshot of all the deals in your pipeline and the ability to drill down into each credit. Or you can begin with the loan review process so users in different departments can view credit status and decisions, and easily add documentation and financials. Another critical area is portfolio management. With views of the entire portfolio as well as details of each loan or credit line, it’s easier to find the information you need and respond appropriately.

The point is that you have many choices. You can take a broad approach to introducing digital technologies or break it down into more bite-sized components. And with the right system, you’ll be able to add customizations that fit your policies and workflow. Be sure to identify and involve your digital transformation leaders early on in your digital transformation efforts.

Choose where you want to focus for your digital transformation efforts:

  • Pipeline management
  • Portfolio management
  • Review management
  • Covenant tracking
  • Credit administration
  • Integration with CRM
  • Special assets management
  • Reporting, and more


Digital technologies have the potential to transform commercial lending. Whether it’s from policy-driven workflows, retrieval of data from internal and public sources, process automation, or integrating compliance solutions into the loan origination process, an automated system can significantly enhance productivity and client satisfaction, especially in this digital age.

“Banks should consider investing in their commercial lending processes and consider increased digitization to keep pace with the competition. They need to offer value-added services to clients that are constantly expecting more.”5

Enjoyed this blog? Our website has more examples of successful digital transformations and the deployment of digital technologies. You may want to view Case Study: Susser Bank.

Enjoyed this blog? You may also want to view Streamlining Your Commercial Loan Pipeline.