Loan Zone: Four Probable Sources of MBL Inefficiency
By Libby Bierman, August 2, 2017
Most people would agree that inefficient is a label to avoid. Yet, when compared to other credit union concerns—capital adequacy, credit quality, member satisfaction, hiring—inefficiency rightfully and obviously takes a backseat for credit union management.
What may not be obvious, however, is the impact that inefficiency has on those other objectives, including a credit union’s ability to serve members effectively. Many inefficiencies are inherited and accepted as “just the way we do things.” But fresh ideas and processes can challenge the inefficiencies, allowing credit unions to work smarter—not necessarily harder—and provide members with a better experience.
When considering the life of a member business loan—a process that starts with a member business’s loan application and ends with portfolio management until the loan’s maturity date—some common inefficiencies sap a lender’s time and attention.
Any of these offenders can prevent a credit union from attracting qualified new members and providing existing members with the fastest and best response possible.
Four probable sources of inefficiency…
• duplicating data entry, with staffers entering the same data into multiple systems
• returning multiple times to the member to collect necessary documents
• hunting down specific loan officers to understand the status of a loan request
• requiring that analysts key in data again to respread financials when new tax returns or financials are collected from members
... and three smart ways to tackle them:
1) Improve transparency in relationship management activities.
At many credit unions, lenders track outstanding loan applications and sales activities in spreadsheets, calendars and notebooks. Without a centralized record system, it’s challenging for management to measure progress or build predictable forecasts. If the loan is approved, the loan officer likely has to enter the data again, in multiple systems, before booking.
For the full story featuring Sageworks, visit CUES – Loan Zone: Four Probable Sources of MBL Inefficiency.