banking Archives - BankPoint

Best Practices for Managing Risk Rating Approvals

For most lenders, and especially banks, the risk rating of a loan is a critical indicator of credit risk. In our experience working with banks and credit departments for 20 years, we’ve seen various mechanisms for how changes to risk ratings are managed, controlled, and approved. In this article we’ll discuss some best practices for managing risk rating approvals and how banks can adopt these practices to improve efficiencies and ensure compliance. It should be noted that these best practices can be applied to other forms of credit risk changes, such as charge-offs, non-accruals, TDRs, loan reserves, etc. But we’ll focus on risk ratings for this article, since they are often a central focus of daily credit administration. 

Defining a System of Record 

When discussing the process by which risk ratings are changed, we should first clarify what it means to change a risk rating. Where exactly is it changing, and how do institutions ensure that the change is reflected in all systems and reports? At BankPoint, we recommend establishing an official “system of record” for risk ratings and other critical information. We define the system of record as the system that is formally designated by the institution as the primary system that should be referenced to determine the current, approved value for the loan information in question. Once a system of record is defined and published, everyone should be on the same page, and all loan officers, credit officers, and executives should feel confident that the defined system holds the correct value. If other systems also contain this field, they should be viewed as supplementary systems that mirror the system of record, and appropriate procedures and interfaces should be developed to ensure all systems are updated and synchronized accordingly. 

Common Legacy Practices 

When working with banks or other lenders, we often ask “Do you have a designated system of record for risk ratings?”. The most common answer we hear is “no”, or “I don’t think so”, but after a little discussion it becomes clear that the core banking system (or loan servicing system) is acting as the default system of record for risk ratings. The next question we ask is “How are risk rating changes approved?” Even in 2021, the most common answer we here is “we submit a status change form”. In other words, they use a printed piece of paper that contains boxes for “Old Rating” and “New Rating”, which is physically signed by the appropriate parties, scanned into the imaging system, and given to loan ops, who performs the actual “file maintenance” on the core system. The approval process is usually manual, often involving interoffice mail, or more recently (with remote work) some combination of scanning/emailing/signing.  

Recommended Best Practices 

It goes without saying that manual, offline processes are inefficient, error-prone, and cumbersome. So, what’s the recommended best practice for automating risk rating approvals?  

At BankPoint we recommend: 

  1. Establishing a system of record for risk ratings and other credit actions.  
  2. Implementing automated workflow to manage approvals of changes to these credit actions. 

When choosing a system of record, it’s tempting (and common) to choose the core banking system or loan servicing system. We’ve spent years evaluating and implementing core systems from all major core banking vendors. In our experience, core systems are usually not designed for credit administration. While the risk rating will definitely be stored in the core, there are typically not controls in place to manage the approvals, history, and audit trail of changes to risk ratings. Therefore, we recommend implementing a different system to act as the system of record for risk rating and other credit related elements. Typically, this system would be focused on credit administration and would include other features not focused on loan servicing, which is the core’s purview. Our customers use the BankPoint platform for this purpose, but of course there are other systems on the market that could be appropriate.  

Once the system of record is established and implemented, an approval workflow should be implemented that conforms to the bank’s credit policy. Generic workflow systems have been around for decades, but banks need workflow systems that are intelligent enough to compare the details of a loan to the bank’s credit policy to ensure the right approvals are included. The workflow engine should be powerful enough to allow for complex credit policy rules, but simple enough that it can be setup and maintained over time as credit policies evolve. In our experience, many workflow solutions (even those provided with core systems) fall short in this area, so banks should be sure to thoroughly evaluate and test workflow platforms before committing to a solution. 

Other factors that should be considered when implementing a risk rating workflow system include: 

  • Notification Filtering – As your institution grows in size and volume, senior approvers may quickly become overwhelmed with approval requests, feeling as if they are being SPAMMED with notifications to approve changes to risk ratings or other credit actions. Be sure the chosen system has controls that allow users to tailor the level of notifications they receive to eliminate inbox fatigue.  
  • Role-Based Security – User roles should be established that represent key managers, department heads, etc. and their appropriate security and approval levels. Specific users should then be assigned to these roles, and the roles should drive the approval process.  
  • Documentation – Approval requests should include appropriate documentation such as loan analysis, meetings minutes, etc. This documentation should live with the approval request in the form of attachments or notes and be accessible before and after the approval is received for audit purposes.  
  • Committee and Board Approvals – It’s common for approvals to be required at the committee or board level. To capture these approvals, we recommend setting up proxies to provide approval in the system on behalf of the committee or board. The approval role itself is usually called “Board” or “Sr. Loan Committee”, but the person actually checking the box could be the board secretary or scribe from the meeting. This person should also attach the appropriate meeting minutes and other related notes to the approval request. 
  • Audit Trail – Obviously, risk rating approvals should be clearly documented and easily auditable. Though the actual approvals are provided electronically, it’s common to provide a printed audit trail to auditors or regulators. So be sure the system you implement allows for printable and electronic audit trails.  
  • Keeping Things in Sync – Once an approval is fully received, the new risk rating is deemed official and is updated on the system of record. But as mentioned above, there are likely other systems that also contain the risk rating (including the core system) that should be updated in a timely manner. Ideally, this update would occur automatically via a system interface. In practice, however, it’s not always easy to update legacy systems programmatically. A more practical approach could be to add an additional workflow step to notify the appropriate users in other departments (such as loan operations) to update the associated system (such as the core system). Upon receiving the notification, the responsible person could easily click on the associated audit trail to see that the required approvals have been received, providing the authority to update the associated system. Once updated, the final workflow item would be marked complete, and the workflow process archived. To ensure that all systems are in sync, the system of record should provide exception reports showing any differences in risk ratings between the system of record and the mirroring systems. These reports should be run and reviewed regularly so that any exceptions can be resolved.  
  • Risk Rating Trends – As risk ratings change over time it can be valuable to see the history and trends of a specific loan, a segment of loans, or the portfolio as a whole. This requires that systems store the effective date of each new risk rating change while preserving the history of all changes. When evaluating systems, be sure the system captures a detailed history of risk rating changes and provides the ability to easily display risk rating history and trends on screens and reports.  

Risk ratings are used by banks and non-bank lenders to provide a snapshot of the current credit risk of a loan. Managing how risk ratings are changed is an important part of the credit administration process, yet many banks are still relying on manual, paper driven processes. By defining a system of record and implementing an automated approval process, banks can improve the integrity and compliance of their loan portfolio, leading to smoother audits and streamlined growth.   

Streamlining Your Commercial Loan Pipeline

The Loan Pipeline Problem 

Increasingly, commercial banks are looking for ways to streamline their commercial loan pipeline. Over the past few years, we’ve met with dozens of banks that struggle with the best way to move from inefficient legacy processes to more modern, automated processes. As we have talked with banks, a common theme has emerged: they continue to use outdated, paperdriven, committee-oriented processes. Creating the loan package itself is not problematic—most banks have well-defined templates that are fairly easy to create and do a good job of summarizing the deal. Furthermore, the approval decision is not a particular challenge, as these decisions are based on years of experience from seasoned commercial credit managers and executives, coupled with recently updated bank policies governing credit risk. 

The problem we see is the inability to process a higher volume of deals in an efficient manner. Too many deals enter the pipeline from multiple sources, resulting in logjams and poor overall communication. Loan officers don’t know where their deal is and when they can expect to get a decision. In many cases, unless the paper file is on their desk, credit officers can’t easily see the history of who submitted the deal and who is next in line to approve. Executive management does not have a simple, real time view of the overall pipeline that includes historical performance results. Add PPP loans or the complexities of a merger to the equation and commercial banks have a real problem. 

Traditional Loan Origination Solutions 

Loan origination systems have existed for years, and there are many sophisticated software packages available to help automate underwriting, documentation, and loan boarding processes. Unfortunately, many of these systems can be complicated, expensive (we’re looking at you, nCino), difficult-to-use, and take years to implement. The problem is not in the software—the real problem is process adoption. Change is hard, and when complicated systems are introduced, fatigue sets in quickly. People tend to fall back on their old ways, especially if those people have been in the business for 20-30 years or more. After spending hundreds of thousands (or millions) of dollars, many banks find themselves right back where they started. To be clear, we do not mean to imply that automated loan origination solutions should be ignored. But in today’s lending environment, commercial banks are looking for an immediate impact to the bottom line.  

Loan Pipeline Management—A Simplified Approach 

At BankPoint, we believe in a simpler approach to the loan pipeline problem. Rather than trying to automate the entire commercial loan origination process, we recommend using a simple, effective online tracking and approval process that includes the following capabilities: 

  • Online, real time tracking and reporting of the loan pipeline 
  • Electronic approval and history with built-in notifications 
  • Dynamic approval routing based on bank policy (asset type, deal size, number of policy exceptions, etc.) 
  • Easy storage and retrieval of all underwriting documents  
  • Simplified, real time reporting including pipeline status, progress reporting, declined/withdrawn reasons, expired pipeline loans, and history 
  • Seamless integration with Salesforce and other popular CRM systems 

Our customers have experienced immediate, measurable outcomes using this approach with the BankPoint Enterprise Bank Management System. Most importantly, they’re able to transform their manual, Excel-based pipeline into an automated process quickly, usually within 60-90 days. 

Interested in learning more about how you can streamline your commercial loan pipeline process? Contact us at info@getbankpoint.com. 

Afraid to get a software update from your vendor?

More enterprises are embracing software as a service (SaaS), including banks. Financial institutions have become more amenable to cloud computing as it has been extensively used and validated as a safe and cost-efficient solution.  

One of the differences between having a piece of software installed within your bank’s network and using the SaaS model is that in most cases with the SaaS model you won’t get previews of changes 

Your vendors are going through change control processes and a substantial amount of validation and testing to ensure that you get the best experience possible after each updateBut you can still be part of quality control by setting up an internal process to review the new solution being delivered to you.  

These 5 steps should be part of your update validation process: 

  1. Be aware when new releases do come out 

Choose one or a few individuals to receive communications from vendors. With SaaS, the updates are usually more frequent than updates from your core systems. Some vendors have fixed release cycles, others update as changes are ready. Either way they will send communications, including pre-views, when applicable, so you want your team to be in the know.  


  1. Based on the release notes, assess areas of potential impact 

Once the key users are identified and registered with the vendor, have them assess the release notes for potential impacts to your operations. Do the changes touch an area on which you heavily rely, or do they cover a functionality that your bank does not use? If webinars, tutorials, or demos are available, have the key users attend and get familiarized with the changes. Changes may include bug fixes, something that will change how your team operates, or new useful functionality that you would benefit from 


  1. Define a testing plan and team to test the changes if needed 

Going through testing will not only confirm the solution continues to work as expected but can also be a wonderful opportunity to get your bank familiarized with the changes. A testing plan depends on the scope of the change and should be based on the review done when assessing areas of potential impact. The areas of greater impact should receive more attention and detailed test casesIf you have a test instance or a sandbox, use it to play out different scenarios and data entries without compromising your production environment. 

Test cases should also be as realistic as possible and mimic real business cases and situations you encounter during normal operations as well as corner cases. If possible, update your sandbox with the latest data to be as close as possible to production.  


  1. Contact the vendor if there are any issues 

Establish a relationship with your vendor where you and your team know how to contact them in case there are any issues that cannot be resolved internally. Don’t hesitate to ask for help, as your vendors want you to have a great, stress-free experience with their solution.  


  1. Define work around steps to mitigate any issues caused by the changes until a fix can be delivered by the vendor 

If an issue is found, how does it impact your operation? Do you need workaround, or can you live with it? If you can’t come up with a workaround, your vendor may have one or two things to suggest, but it is important that the workaround is documented and shared with the team so that operations can continue until the vendor can address the issue.  


Recurring vendor updates to your SaaS software are a necessary part of the software lifecycle process. But by following a few simple steps outlined above you can mitigate risk and ensure a smoother upgrade process for all involved. 

Case Study: Independent Financial

Bank achieves extraordinary growth with enhanced visibility and controls


Excel spreadsheets were no longer going to cut it. Independent Financial needed a better way to manage their real estate owned (REO) property portfolio. Stuck using a highly manual process that was cumbersome and time-consuming, the bank needed to improve efficiency. That’s when someone in the bank’s finance department suggested BankPoint — a move that would eventually lead to extraordinary growth and change the bank’s future for the better.


“We wouldn’t have been able to book the number of loans that we did for our small business customers had it not been for the support and expertise that BankPoint brought to us.”
Matt Duncan,
Executive Vice President and Senior Risk Officer,
Independent Financial

View the Case Study

Seven signs you need a bank management system

The days of struggling with your core system are over. Modern banks are adopting comprehensive bank management systems to supplement the core and make it easier for all staff members to perform their daily functionsSimply put, a bank management system is an enterprise solution that consolidates information across the bank, then provides workflow and other vertical solutions in a single, intuitive platform. But how does a bank know if they truly need a bank management system? If your bank is guilty of one or more of the following, it’s a good indicator that it’s time to implement one. 

  1. Using Word or Excel to store critical information 

We all use word processors and spreadsheets in our daily jobs. But banks cross a dangerous line when they begin storing critical information in these tools. Examples include using Word or Excel for credit administration “linesheets or loan/asset reviews. Spreadsheets are tempting to use for capturing loan information and calculations that don’t have a home in the core or elsewhere, but they have serious drawbacks that can leave your bank struggling. Modern bank management systems like BankPoint are designed to eliminate the use of spreadsheets for storing critical information off-line. 

  1. Storing files in local drive or shared drive 

Is your bank storing sensitive files in a shared drive, or worse, a local hard drive? By sensitive files, we mean anything containing information on loans, deposits, customers, or transactions, as well as imaged documents. In our analysis of banks’ data storage architecture, it’s common for us to discover files containing sensitive information (especially imaged documents) on shared drives (sometimes labeled “s: drive,” etc.). Why are banks using shared drives to store sensitive data? Usually, because they don’t know where else to put it. That’s one reason bank management systems exist – to provide a home for data and documents that don’t have a natural home elsewhere. 

  1. Renaming files based on date 

When is the last time you opened a spreadsheet containing critical information, then saved it as a different name with the date? This common usage pattern is another warning sign that you are misusing spreadsheetsInformation that changes over time (such as an annual loan review or appraisals) should be managed in a system that is smart enough to manage versions. sound bank management system will have this capability built in. 

  1. Emailing documents for approval 

If your bank is still using email to approve documents, such as risk rating changes, it’s time to considering implementing a bank management system. While email is simple and straight forward, there’s no easy way to see the audit trail in a single location, and there’s no way to guarantee that your credit policy is being followed. By using a bank management system, you can automatically enforce the credit policy via configurable workflows that are repeatable and consistent, while showing the audit trail in a single screen.

  1. Having multiple systems open at once 

Ask yourself, in the course of a day, how many different systems you have open on your desktopIf you find yourself switching between three or more systems regularly, that’s a sign that information is scattered across various systemswell-designed bank management system can significantly minimize the number of systems you have open by consolidating data into a single, easy to read platform, reducing desktop clutter, and streamlining your daily workflow. 

  1. Lots of copy/pasting 

Do you find yourself copying information from one system to another regularly? Perhaps you are copying loan balances from the core system into a spreadsheet or another system. Manual copying and pasting is a reliable indicator that your systems are not well integrated, and a bank management system may be in order. 

  1. Unable to clearly identify the system of record 

Every critical data element should have a single system of record, even though it may appear in multiple systems. Does everyone in the bank know the system of record for appraisals? What about risk ratings? Often the answer is “the core system,” but if these values are being updated and managed outside of the core, there’s a good chance the core is a secondary home that is only updated after the proper signoffs have occurred. Bank management systems with approval workflows and audit trails may be a more appropriate system of record that is controlled and published for all to see (including auditors and examiners).  

While bank management systems are not a panacea for all problems in a bank, they can fill in critical gaps between the core system and other processes. If the warning signs above are prevalent in your bank, we strongly encourage you to explore the adoption of a bank management system like BankPoint. The benefits will far outweigh the associated time and expense for years to come. 

Challenging times, updated processes

In these days of the pandemic, most of us found ourselves working from home. For some this was nothing new – they already worked from home, had worked from home in the past, or occasionally switched between office and home. For others this was a sudden and change of infrastructure and the work culture.

Moving an entire financial institution to work remotely can be a challenge, even with modern technology at our disposal. Information Security plays an important part in daily activities, and one or more traditional brick and mortar environments can facilitate for an easier way to monitor and control sensitive data. Now, having all your staff working for home means additional locations to secure, VPN access to provide, and all the investment, both time and money, that comes with it.

There is also the human aspect, of course. Lending is a traditional industry, where decisions are usually made from personal interactions, in committees and board meetings, and then documented with ink on paper. You may have been forced to find band-aids and workarounds. These workarounds can be observed in the overuse of spreadsheets, e-mails, and imaging systems, which in general means the misuse of those applications.

As infrastructure and work culture changed, so did the processes. New ways to communicate and interact with colleagues, exchange files, make decisions, and store information came up.  More than ever we need to be prepared to access the information electronically and have a way to collaborate remotely. If your bank does not have a solution that allows you to efficiently work and produce from anywhere, it is now time to get one. You want to learn from this experience and be prepared for what comes next.

All systems have gaps – here’s what you can do about it

Every year, hundreds of banks choose new systems to help improve their business operations. Each of these banks typically goes to great lengths to evaluate the new system and vendor, hoping to minimize the risk of a bad implementation or a system that doesn’t fit the bill. But how do banks really know if their evaluation is accurate? How can they be sure the new system will meet their needs?

BankPoint started as a consulting company, and we’ve been putting in banking systems for more than 20 years. In our experience, we’ve never seen a system that didn’t have gaps (a material deficiency in the system that didn’t meet the stated requirements). Furthermore, it’s nearly impossible to fully test a system during vendor demos, or even in a lab environment. Until the system is up and running in production, you won’t know for sure whether it will meet all your needs. There are simply too many variables and too many requirements, some of which have yet to be discovered.

Choosing the Right Vendor

So, what can banks do? How can they choose a system and sign a multi-year contract if they know there will be gaps, and what can they do to close the gaps once identified? The answer lies with the vendor. The evaluation of the vendor is, in many ways, more important than the evaluation of the system itself. Because we know there will be gaps, the vendor must be willing and able to close those gaps. In other words, the vendor must be flexible enough to bend but not break.

When selecting a system, we recommend focusing on two things: requirements fit and vendor flexibility. First, look for 80-90% coverage of your must-have features when evaluating system functionality against your requirements. Why not 100%? Because it’s nearly impossible to find a system that fits 100% of your requirements. Instead, look for a system that largely meets your needs but may require a few alterations. Second, be sure the vendor is flexible enough to adapt the system to your needs. Here’s where you fill in the other 10-20% of the missing requirements. If you choose the right vendor, they will help you fill in those gaps during the implementation process. But how, exactly, will they do that?

Closing Requirements Gaps

Once you’ve identified functional gaps (assuming there is an 80-90% fit in other areas) you should work with your vendor to close those gaps during the implementation using one of the following methods:

  1. Process Change

Often, you may discover that a requirement is not actually a business requirement, but rather a holdover from legacy processes. Many banks suffer from “we’ve always done it this way” syndrome, leading to a list of requirements that are not business requirements, but requirements rooted in the old way of doing things. A good vendor should always ask, “Why?” If you peel the onion on a requirement by asking, “Why is it done that way?”, it should eventually lead to a business need. If one of the answers is “because we’ve always done it that way,” it’s time to re-examine your process. Modern, robust systems will contain a bevy of best practices that you should be looking to adopt. The bank’s processes should strive to adapt to the system’s processes, rather than the other way around. With a little analysis, you may find that some of your requirements are not needed.

  1. Workarounds

For some gaps, workarounds may be sufficient. Work with the vendor to look for ways of meeting your requirements without enhancements. This usually involves adding a few extra steps to a process or utilizing multiple areas of the system to achieve the desired result. In many cases, workarounds can be a valuable approach to resolving system gaps, especially gaps that are not as critical. A good vendor should be able to recommend several workarounds for each requirements gap.

  1. System enhancements

When all else fails, consider system enhancements. If you’ve discovered a critical gap in requirements that can’t be adequately resolved with process change or workarounds, ask the vendor if it would be possible to enhance the system to provide the missing functionality. Depending on the size of the gap, an agile vendor should be able to develop that functionality during the implementation, so the feature is tested and ready before your launch date. If the gap is critical and you’ve discovered it early enough, you can even bake the enhancement into the contract, requiring the vendor to deliver the feature to your satisfaction within some time period, or you can terminate the agreement. Don’t hesitate to hold the vendor accountable for critical system gaps.

Of the three options above, system enhancements are usually the most difficult, depending on the complexity of the enhancement. This is where vendor flexibility comes into play and why the selection of the vendor is so critical. If the vendor is a large company, you may find that they are more rigid. Software changes can be challenging with larger vendors, leading to costly, time-consuming enhancements, or worse, no enhancement at all. If the vendor is a smaller or newer company, they may not have the maturity to develop critical enhancements on the fly. Look for a vendor in the sweet spot: big enough and mature enough to deliver on system enhancements, and agile enough to deliver the enhancements quickly. Talk to the vendor’s references and ask if they were able to deliver on system enhancements.

All systems have gaps. Your goal should be to discover those gaps as quickly as possible during the system evaluation process, or even during the implementation. If you’ve chosen the right vendor, they can help you close those gaps quickly so you can enjoy the benefits of your new system sooner than later.

3 Common Treasury Pipeline Challenges

man jumping hurdles

Reducing the time it takes to get your commercial clients up and running with new treasury management services can improve your bottom line and bring joy to your customers. But speeding up the onboarding process is easier said than done. To streamline your efforts, you need to identify bottlenecks and friction points, and then take proper steps to resolve them.

Here’s a look at three common challenges that may be slowing things down, as well as some tips on how to speed up your treasury management onboarding process.

1. The Forest for the Trees

Amidst the day to day grind when your team is working hard just to get things done, it can be difficult to know how well things are going (or not going). It can be harder still to pinpoint where you have friction points in your process flow that may be stalling out your new treasury service requests.

Having clear visibility into the current state of your treasury management services pipeline becomes vitally important as you work to scale your operations, or if you’re moving to a decentralized model where you have teams working at different locations.

Without an enterprise treasury management onboarding solution in place, you might not have the objective process data points you need spot trends, friction points, and opportunities. Here are some solutions to consider.

Spreadsheets, really?

If you’re starting with nothing, then a simple shared Excel spreadsheet can go a long way towards giving you the management oversight information that you need. Start with capturing the key process stages as columns in the spreadsheet and then use a separate row for each treasury management service request that you work on. Record the date that each request moves into each stage as well as the final delivery date to the customer. With a little bit of Excel formula magic you can see average time per stage, graph historical trends, and more.

This approach can work well for small teams with relatively light volumes. However, you can quickly outgrow the usefulness of this spreadsheet-as-an-application approach.

Online tools

If you’ve outgrown spreadsheets, then maybe an online project collaboration tool could help. In recent years a number of free or low-cost online services have cropped up to help teams manage their shared work. Trello is one great example of these services and could be used to track where your treasury management service requests are in their process journey. It will show you at a glance how many requests are sitting in each of your process stages, who is working on them, and can also capture comments from your team as they’re working the items.

Other online service options that we’ve seen teams use include Sharepoint (you may already have what you need running in-house) or a case management system like JIRA. BankPoint also offers an innovative treasury management pipeline solution that can streamline your operations and improve efficiency for your bank.

2. The Paper Chase

Your onboarding process will invariably require you to gather signatures from your customers on legal agreements related to the services that they’re setting up. For your more complex services and larger corporate customers this could mean getting signatures on multiple documents from several different parties. This can all add up to lengthy process delays. This is especially true if you’re still having your customers send you signed originals in the mail or if they’re scanning signed paper copies and emailing to you.

Ditch the paper

If you’re not using electronic signatures today, you should seriously consider it. The large e-sig vendors all have a range of offerings, but generally allow you to send documents out to multiple parties at the same time. This can help reduce signing delay as each party can review and sign the document at the same time. Additionally, the e-sign services have built in reminder capabilities which can send follow up emails to signers who procrastinate.

Before moving to e-signatures, be sure to check with your compliance and legal departments.

3. The Approval Obstacle Course

Some of your treasury management services may carry a degree of credit risk (e.g. ACH, wire transfer, etc). This means that your credit policy will have something to say about who needs to be included in the internal approval process for these services.

As with document signatures, the more internal approvals that are required, the longer it can take to complete delivery of the service to your customer.

Given that email is still the primary approval mechanism we see banks using today, there is added risk of things getting hung up in one persons’s email backlog. It can be especially difficult with email to determine where a particular request is stalling out.

Is email the best we can do?

Instead of email, consider deploying an automated workflow system for your treasury service approval process.

You may already have some workflow solutions in place which you could leverage for this. Microsoft Sharepoint Workflows could be a good place to start, especially if you’re already running Sharepoint for other things in your bank. Sharepoint workflows have some building blocks for setting up internal document approval workflows, so you’re not having to start from scratch.

If you’re already moving some of your operations to the cloud, take a look at Microsoft Power Automate (formerly Microsoft Flow). The tooling can be simpler to setup and fold into your current processes. Also, if the mere thought of starting another Sharepoint project makes you shudder, then this could be a welcome alternative. Finally, consider a dedicated Treasury Pipeline solution like BankPoint, which has built in approval workflows.

By examining your Treasury Onboarding process, you can improve the customer experience and reduce risk in your organization. From onboarding workflow, to e-Signatures, to electronic approvals, there are multiple ways to streamline the process.

Ready to speed up your onboarding process and deliver a better experience for your treasury management customers? Contact BankPoint or schedule a demo today to see how our powerful bank management system can drive results for your bank.

Five reasons to automate your loan review process

All banks perform loan review. It’s an important part of a bank’s credit risk strategy and is even more critical in times of economic downturn. While some banks outsource their loan review process, others have an internal Loan Review department that is responsible for sampling a portion of the loan portfolio and performing individual reviews on a regular basis. For those banks that choose to perform these reviews themselves, many are still using manual processes that rely on spreadsheets or Word documents to create “line sheets” or other loan review templates. Based on our experience, many banks are still approaching loan review in this cumbersome, outdated manner. Here are 5 reasons banks should consider automating their loan review process with a system like BankPoint:

  1. Integration with the core system

Because loan reviews are performed at a “point in time” for a specific loan, the reviewer needs a snapshot of the loan details for a specific date. Usually, reviews will be performed in batch as for a sampling of loans. Without a loan review system, there is no easy way to populate a review template with the specific data values for the loans under review. Instead, users must hunt for this information within the core system or look it up in older reports. Once the data is identified, it must be manually copy/pasted from the source report to the loan review template. This is a tedious, error prone process that dramatically increases the reviewer’s workload and introduces risk.

Modern loan review systems like BankPoint are integrated with the core system and will automatically populate a loan review template with values from the loan as of the effective date, thereby eliminating manual error and streamlining the loan review process.

  1. Better team collaboration

With a spreadsheet-based process, a single user manages the loan review by editing the spreadsheet and sharing the file when complete. This discourages collaboration and makes it harder for other team members to review their work. With a multi-user loan review system, everyone is singing from the same sheet of music. Modern loan review systems like BankPoint contain online review templates, which contain analysis, narrative, notes, documents, findings, and recommendations. These templates can be seen by the entire team and reviewed as appropriate (with the proper permissions). Furthermore, the loan review manager(s) can see all reviews in a single system with easy drill down capability, so they are better able to oversee the team’s work and ensure adequate progress is being made.

  1. Easier planning

With most loan review systems, all reviews are maintained as part of a plan for a specific period and purpose. For example, “2nd Quarter CRE Loans” could contain a sampling of all commercial real estate loans over a certain dollar value that need reviewed as of June 30th. By capturing all reviews into a single plan, management can review and manage the team workload, assignment, review status, consolidated findings, and more. This allows for better internal planning and executive reporting.

  1. Automated approval workflow

Loan reviews by their nature are subject to review and approval, so most banks will have one or more people that examine the completed review and look for errors or adjustments. Without an automated system, the review process is relegated to paper files with sign-off cover sheets, or some sort of manual email approval process that is difficult to manage and track. With automated solutions like BankPoint, the approval process is built into the system. Once a review is completed and submitted for review, the system automatically routes it to the appropriate person based on the bank’s policies. Everyone can easily see if a review has been approved, where it is in the approval process, and the audit trail of who has approved it along the way.

  1. Reporting

As mentioned in a previous article, spreadsheets have numerous limiting factors, including limiting reporting capabilities. With an automated loan review system, banks can easily report on statistics, trends, next review dates, findings, reviewer and officer performance, and other metrics. This allows the loan review department to identify areas of improvement and become more efficient.

Financial institutions with internal Loan Review departments that are still using a spreadsheet-based approach for loan review are missing an opportunity to improve their process and outcomes by not adopting a modern, streamlined loan review system like BankPoint. In this article we’ve listed just five reasons we think they should consider upgrading. Contact us today to learn more and see how BankPoint can transform the way your loan review team works.

The problem with spreadsheets

Never in human history has such advanced technology been available to so many. We unlock our phones using facial recognition technology, check the weather using our voice, and operate home appliances remotely. With so much incredible technology available to all of us, why are we still relying on old fashioned technology like spreadsheets at the office?

From loan portfolio management to covenant tracking, bankers everywhere are using spreadsheets to track, compile, and organize important data. In our view, this is a serious problem, as spreadsheets can represent a significant threat to your organization. Here are 8 reasons you should ditch spreadsheets and upgrade your software systems to mitigate risk at your bank.

  1. Poor security

Spreadsheets have limited security options, and files can easily be emailed outside the organization. This is a violation of GLBA/NPPI regulations, and we are routinely surprised to receive emails with GLBA data included in attached spreadsheets.

  1. Prone to manual error

Copy and paste issues are a common problem that can lead to material errors in board reports and call reports. And the opportunity for simple mistakes, like deleting partial rows, is extremely dangerous. We’ve seen at least one case where a user deleted information and “shifted cells up”, which then attributed the balances and addresses of accounts to the wrong customers. The bank only realized the problem when they started getting calls from customers complaining about incorrect statements. Not good!

  1. Risk of data loss

Spreadsheets are often stored on a shared drive, or worse, a local hard drive that may not be backed up or properly secured. Bank employees are risking data loss by choosing to store critical information in spreadsheets stored in unmanaged locations.

  1. No access control

Spreadsheets offer few controls on who can read, update, and delete data, compared to a multi-user software system where varying levels of user privileges can be established.

  1. No data versioning

Users can’t easily see prior versions of data without saving multiple dated copies of the same spreadsheet. There’s also no audit trail, so there’s no way to tell what was changed and by whom. This is a common criticism from examiners and auditors.

  1. Single user model

In most spreadsheets, only one user can edit the information at a time, leading to data locking or a “last one wins” model for data entry. This discourages collaboration and again risks data loss.

  1. Data is not easily reportable

It’s difficult to report on data that is buried in spreadsheets. If a spreadsheet is acting as the “system of record” for key data values across the bank, this can present real headaches for enterprise reporting. How many hours are wasted “rolling up” data in spreadsheets for monthly reports?

  1. Data is not easily integrated

Spreadsheets are static and can create “mini-silos” of information that it difficult to share across systems. Poor system integration is a key problem in today’s community banks, and the widespread use of spreadsheets is only compounding the problem.

How to minimize the use of spreadsheets

With all the problems listed above, it’s easy to see why spreadsheets are less than ideal and should be avoided if possible. So, why are they so prevalent in banking today?

For starters, it’s important to recognize that spreadsheets are probably not the first choice for most people. Their use is predicated on the fact that many banking systems are outdated and difficult to use. Because core banking systems can be frustrating and limiting, many bankers feel they have no other option than to use spreadsheets to track and report on critical information. It should be noted that this problem isn’t limited to smaller community banks. In working with larger banks across the country (over $10B), we’re always surprised to see a reliance on spreadsheets.

No matter the size of your organization, the key to avoiding spreadsheets and their related problems is to upgrade your technology stack with more modern solutions. Systems like BankPoint can provide unparalleled data visibility across your organization while providing an outstanding user experience through an intuitive user interface. The result is happy employees that are empowered to do their jobs better and faster.

Spreadsheets can be useful tools for organizing data. But relying on spreadsheets to manage critical data at your bank is a recipe for disaster. By upgrading your software systems, you can help eliminate spreadsheets, thereby minimizing risk and achieving better outcomes for your bank.

Ready to eliminate spreadsheets at your bank? Contact BankPoint or schedule a demo today of our revolutionary bank management system.