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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 Based on our experience, many banks are still approaching loan review in this cumbersome, outdated manner.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.

Is your banking software vendor truly your partner?

When you purchase a new banking system, you get more than a piece of software. Or at least you should. From training to ongoing support, there’s a tremendous difference between a vendor who sells you a system and a true partner who will work with you to enhance your banking operations. But how do you know which is which? Here are some questions to help you determine if a vendor is just that, a vendor, or if they might represent something more meaningful for your bank.

Do they have real banking expertise?

A software vendor that doesn’t have real-world banking experience will never have the institutional knowledge necessary to act as your true partner. The company may have been founded by a banker, and their salespeople may have some cursory knowledge of how their solution works in a banking environment. But for a real partner, you need to find a vendor that can offer expert insights based on experience. Ask any salespeople or other contacts about their banking background and what they can do to help improve your bank.

Do they want to understand your issues?

A vendor won’t be able to help solve your problems if they aren’t interested in learning what they are. You should be able to get a sense of this early on in the process, especially if you go through a software demonstration. Does the salesperson spend more time talking about features and system capabilities, or do they ask you about your needs first and foremost? A vendor looking to make a sale will talk about their program, while a true partner will take the time to find out what your challenges are and what you really want to know. Look for a vendor who puts your needs above their own and you’ll likely find one who is truly invested in your success.

How quickly do they respond?

If you have a question or need to troubleshoot a problem with your banking system, vendors will show you how much they care about you by the speed of their turnaround time. Any delays could prove costly, and a good partner is one who acts on that immediate need and moves quickly because they care about your business. It can take some companies weeks to fully resolve customer issues, while others respond and are actively working to solve the problem in only a few hours. Go with the software provider who is there for you when you need them most.

Do they go above and beyond?

Sometimes the only way to solve an issue is to go beyond the immediate problem to the underlying causes. For example, you might think you have a process problem when onboarding your treasury management services customers, but it could actually be an issue that requires system automation to fully resolve. A vendor that can identify those issues and give you insights on how to fix them, not merely put a Band-Aid on the problem with a quick workaround, is one worth keeping around. This may mean that the solution your vendor proposes isn’t the easiest or the cheapest one, but this is a good thing. When a vendor is willing to tell you something you may not want to hear, you can be sure they truly want what’s best for your organization.

Do they continue to be there for you?

Once they’ve made the sale, some banking software companies consider the engagement over. Sure, their helpline will be open if you have a problem. But their contact person will seemingly disappear, moving on to new targets as you struggle with implementation and the best way to utilize the software. Instead, find a vendor who will stick with you long after agreements have been signed. They should not only provide training to help facilitate a smooth transition to the new system, but they should also be there for you down the road. When a new software update becomes available, or they release a new version of the system, they should proactively reach out and educate you on the new features, not try to sell you the latest development. Although you won’t know how those interactions will go until after you’ve made your purchase, it pays to evaluate the service you’re getting from your vendors at every stage of your engagement.

Finding a software vendor that you trust enough to consider a partner isn’t always easy. But by looking for some of the characteristics discussed above, you can identify the vendors most likely to be worthy of your trust. From there, you can start building a relationship that will pay dividends now and into the future.

Ready to upgrade your banking systems with the help of a true industry expert? Contact BankPoint or schedule a demo of our powerful bank management system today.

How banks can streamline regulatory exams

As all bankers know, bank exams are an unwelcome but necessary part of life. As a friend of mine who owned a bank once said, “It comes with the dinner.” When teams of regulators descend on your bank, it can create a serious disruption in your operation and cause no small amount of stress for all parties involved. Most bankers just want the regulators to leave as quickly as possible so they can get back to normal. By upgrading your technology, you may be able to do just that. Here’s how you can streamline the exam process and help your bank come through exams with flying colors. 

The challenge with exams 

In order to understand how to speed up exams, it’s important to first acknowledge how tedious and outdated the current process can be. In our experience, many banks are still putting regulators in a conference room full of paper documents. When an examiner can’t find what they need in those files, they turn to the bank with questions, sending bank employees scrambling. This Q&A process can take days or weeks, and the entire experience is not only stressful, but it costs your bank precious time and resources while simultaneously disrupting normal operations. 

Why are banks still following this outdated process? Partially because that’s how they’ve always done it, but also because they don’t see another option. Thankfully, there is a better answer. With the right software, you can speed up the exam process and limit headaches for both you and examiners. 

Streamlining exams 

To streamline the exam process, consider adding software like BankPoint to your organization. BankPoint integrates with your core banking system and includes a comprehensive set of tools that can speed up exams by making information more accessible to examiners. 

In one case study, FDIC examiners used BankPoint’s interface from their FDIC offices to review the bank’s loan portfolio and imaged documents, thereby eliminating paper files and making the entire process easier and more comfortable. Because regulators can’t access a bank’s network directly, any electronic review system must be accessible remotely. With BankPoint, examiners never have to leave their office and can log in using a user profile that limits them to the specific information they need. Instead of spending days preparing paper files for review, the bank can simply create an electronic portfolio within BankPoint that is ready for access by examiners. 

By bringing the exam process into the digital age, your employees can focus on their normal tasks and you can save valuable time and resources. We talked to one FDIC lead examiner-in-charge who used BankPoint to complete an exam, who said they did a week’s worth of work in a single day. 

“It’s the easiest system I’ve used in my 30 years of examining banks,” the examiner said. 

The benefits of faster exams 

The benefits of using software like BankPoint are twofold. First, it helps examiners do their jobs quicker, so they can be out of your hair faster. Second, being able to answer an examiner’s questions quickly and easily inspires confidence that your bank is being well managed. This may be the biggest benefit of all. Examiners are there to find problems. If you can’t answer their questions, that’s not good. If you don’t even know where to find the answers, that’s worse. By demonstrating your ability to quickly identify and respond to questions with a system like BankPoint, you can show examiners that you are on top of your game. 

Here’s another thing to consider: As much as you don’t want examiners in your office, they likely don’t want to be there any longer than they have to. Examiners are human after all, and nobody wants to spend weeks sitting in a conference room poring over paper documents. If you can minimize the pain and make their jobs easier, it may not shield you from criticism, but it can make the experience more pleasant for everyone involved. Considering the power that examiners have over your bank, it’s never a bad idea to make their lives a little more comfortable. 

Exams and audits are a necessary part of the banking industry. But with the right technology, you can shorten the process, limit risk, and get your banking operation back to business as usual. 

Tired of the burden the exam process puts on your bank? Contact BankPoint or schedule a demo today to see how our powerful software solution can limit risk and streamline exams for your organization. 

Managing credit risk in the downturn

The economic fallout from the coronavirus pandemic has been nothing short of extraordinary. Unemployment is skyrocketing and the federal government has been scrambling to provide relief to affected industries and businesses. Stimulus packages and cash reserves will help many businesses survive for a while, but the longer the crisis lasts, the more problem loans we’ll see. That means banks need to start preparing their operations now for the wave of special assets that’s soon to come. 

History lessons 

The current health crisis is unprecedented. But to understand how banks will need to react to the subsequent economic downturn, we only need to look back a few years. 

Following the financial crisis of 2008, regulators became much stricter on commercial lenders, demanding better portfolio risk management, better controls, and better decision-making. You can be sure they won’t be late to respond to this crisis. Banks will need to have robust systems in place to track and manage special assets or risk regulatory intervention. The good news is that there is still time to prepare. 

Better special assets management 

BankPoint wants to help banks weather the storm, and encourage bankers to explore our special assets management solutions. 

With BankPoint’s intuitive interface, bankers can easily manage credit actions and help mitigate credit risk. Our system allows lenders to track new Paycheck Protection Program loans, deferment and forbearance requests, loan downgrades, watchlists, impairment reviews, and other credit actions. BankPoint also features a fully featured REO management module should your bank take on significant real estate assets. 

BankPoint has been around for years, survived regulatory scrutiny, and been battle-tested in economic conditions very similar to the ones we find ourselves in today. We’re confident we can help banks navigate these difficult times and reduce risk as much as possible. If you’re looking for ways to better prepare your bank for the economic downturn, please contact us today. 

Do you need really need to automate your treasury pipeline?

Treasury management services are growing in number and complexity. Keeping up with that pace of change, and ensuring that you’re able to approve, set up, and deliver new treasury services efficiently to your commercial customers can be a daunting task. That’s why many banks are now considering automating these processes as a way to reduce that burden. While it can certainly help alleviate some of the manual tasks, automation can also be a big and painful process. So, you need to decide if it’s really worth it, or if you can get away with making a few tweaks to your existing process to improve efficiency. Here are some important things to keep in mind as you consider whether or not to automate your treasury pipeline system.

Where to start

Automation can provide a huge boost to productivity, but it’s not always clear when and how it should be applied. Just because you might be able to do something faster doesn’t always mean that you’re achieving your objectives.

So, before you do anything, make sure that you NEED to automate. If your current systems are already doing the heavy lifting, or your volumes are small enough that you’re not seeing any real operational strain, then you might be fine with where you are right now. It’s also important to start with the big picture in mind. Make sure that you have a solid high-level grasp of your current treasury management pipeline processes, including the systems which are involved along the way.

Can you draw a simple diagram on a whiteboard to explain the end-to-end process to someone new to your group? Are there multiple systems and departments which typically get involved in the decision-making and setup process? A simple picture here can sometimes help you spot inefficiencies and opportunities for streamlining which might not require any system changes.

All in all, a little bit of analysis on the front end can pay big dividends down the road.

Follow the data

Collecting data from your systems and plugging that into forms and spreadsheets is likely a big part of your current onboarding pipeline. Mapping out the systems involved, and even going down to the level of documenting which bits of data are coming from each system, might show you where you can reduce the number of systems involved. If you’re able to reduce the number of systems or touchpoints involved in collecting the data that you need, this will not only help you in the manual process steps, but it will also help you when it comes time to automate (if you end up needing to).

If you are pulling data from multiple systems, are they the right systems to be looking at? Generally, there will be an authoritative source for a particular type of information. You might have several systems which are authoritative for the different data you’re collecting. For example, you may have a specialized loan system which has the complete picture of outstanding loan commitments to customers, but deposit balance information may reside on a different core banking system. It’s not uncommon for data to be reflected on multiple systems. Knowing which is the source of truth for a data topic could be important because sometimes data between systems can drift.

If the data you’re collecting is a key component in the approval process, make sure that you’re getting that data from the most reliable system.

Let metrics guide the way

Are you able to see today how long it takes to approve, set up, and deliver a new treasury management service to your customers? Are you able to see this information broken down by service type or geographic location?

If not, this is certainly a good place to start. Without a good understanding of where you are today, and knowing where you want to be, you can’t really determine if things get objectively better after a process change or automation.

Monitoring of this type doesn’t have to be done in a specialized or dedicated system. Start with a simple Excel spreadsheet and log all the treasury management onboarding requests which are processed for two weeks.

Assessment time

With a clear picture of your current process, including data sources and operational metrics, you’re now at a point to determine if you need to automate.

If you can avoid making large system changes, do. If your current throughput is not too far off from your objectives, and it’s not causing undue stress on your staff, then look for small incremental changes that could bring improvement. Look for simple process adjustments to reduce the number of steps in the overall flow. Also, look for ways to trim down the number of department handoffs that occur.

If you find after your assessment that you’ve got a bigger hill to climb, then it may be time for some automation lift. If you do need to automate, start simple. Are there ways to streamline or automate the collection of data from your systems to reduce the amount of manual keying? Can you leverage an electronic signature system to simplify the process of getting documents signed?

If those changes aren’t enough to get you to where you need to be, then it may be time to find some specialized systems to help with the areas that are throwing up the biggest hurdles. BankPoint has created a unique treasury pipeline solution to automate your onboarding process and increase efficiency throughout your organization.

The world of treasury management is changing quickly. By taking time to evaluate your current system and the potential benefits of automation, you can streamline your processes and overcome the biggest challenges facing your bank.

Want to make your treasury management services onboarding process more efficient? Contact BankPoint today to see how our powerful automation solutions can increase efficiency for your bank.