Integrated Portfolio Management Strategies Allow Credit ACE to Shine

Posted by Patrick True

Nov 17, 2017 11:00:00 AM

The rise of integrated portfolio management systems will have a significant impact on credit officers’ ability to evaluate the condition of their commercial portfolios and take quick action when needed. Throughout the years, we have discussed the Credit ACE formula associated with commercial loan management functions.

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Topics: Commercial Lending

5 Emerging Game Changers in Commercial Credit Risk Management

Posted by Patrick True

Nov 8, 2017 7:00:00 AM

As the financial services industry enters 2018, technological advancements within the sector are beginning to have a significant impact on the way credit risk managers, from chief credit officers to front line lenders, handle their responsibilities. Five emerging trends are likely to reshape the business of commercial lending in the months and years ahead. Many of you are likely already seeing some of these changes in your institutions. The business of commercial lending is in the midst of a renaissance that has the ability to significantly enhance communication between lenders, their clients, and their prospective clients.

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Topics: Risk Mitigation, Commercial Lending

The Next Wave of FinTech: Portfolio Management

Posted by Mark Messick

Nov 3, 2017 11:00:00 AM

While the majority of the financial technology focus in recent years has been on loan origination systems and automated decision tools, portfolio management is the real key to long-term success in commercial lending. Just ask lenders how many bad loans they’ve made during their career. The large majority will tell you that each time a loan was made, the financial institution had every reason to believe it was a good deal. The loans were within policy and conditions at the time called for approval and funding. When loans stop performing, it is almost always because circumstances have changed. From macroeconomic factors to poor business management to other direct influencers, loans can deteriorate for any number of reasons. That’s why the next significant area of fintech development will be in portfolio management, rather than the pre-funding processes.

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Topics: Commercial Lending

4 Steps Community Financial Institutions Can Take to Compete with Online Lenders

Posted by Craig Laures

Oct 25, 2017 7:30:00 AM

Just as each community is unique in stature, industry, economy, and opportunity, so is each community financial institution (FI). Regardless of our composition, the one thing we all have in common is a limitation of time.

Let’s agree to make the most of it.

Online lenders (also called alternative lenders) have recognized and seized the fact that time is limited. In response, they have created channels to significantly reduce the amount of time required to obtain another limited resource—money. These lenders are helping businesses get more of what they want: satisfying their need for more time to focus on their business and more money to execute their creative and industrial ideas.

Let’s face it: banks and credit unions today are faced with overwhelming, burdensome regulatory requirements to accept, process, and fund commercial loan applications.

Alternative lenders are not.

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Topics: Lending

Capturing the Emerging Businesses Market by Achieving 0 to 60 with Record Results

Posted by Renee Weatherby

Oct 20, 2017 11:30:00 AM

Providing loans to young and emerging small businesses should be considered “mission critical” for any community-based financial institution hoping to grow its loan portfolio. According to the recently released report on startup firms by the Federal Reserve, 20% of all employer firms in the U.S. have been in business for less than 2 years while another 14% have been around for 3 – 5 years. That is about a third of all employer firms. Additionally, more than half of these firms sought financing in 2016.

Here are a few other key business metrics from the report:

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Topics: Commercial Lending

5 Things You Need to Know About CECL

Posted by Brad Dahlman

Oct 11, 2017 4:00:00 PM

Current Expected Credit Loss (CECL) is far more than just a new Financial Accounting Standards Board (FASB) regulation to achieve regulatory compliance. The active credit management and integration of the potential credit losses to your financial institution (FI) is key to how you should be running your organization in the years to come. Taking a look at some simple tips can help to not only start the planning for CECL, but to then take your model results and implement them in your business. The CECL results you produce can be invaluable for your institution in order to stay competitive in the marketplace and increase the profitability of your organization.

Most financial institutions have some knowledge about the new CECL standards, however, many FIs still have questions about the requirements, what to expect, how to begin preparing, and the difference between various CECL models. Here is what you need to know about CECL...

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Topics: Financial Services Industry

It's Time to RATE the Effectiveness of Your Small Business Lending Process

Posted by Renee Weatherby

Oct 6, 2017 11:00:00 AM

Of the $1.9 trillion dollars in commercial and industrial loans held by FDIC insured institutions today, approximately $296 billion (15%) are smaller than $100k. Small financial institutions have been taking a hard look at how to deliver these loans in a manner that is beneficial to business owners while also taking their own operating costs into account. Since the early 1990s, larger financial institutions have worked to develop scoring models to help increase efficiency and profitability within this segment of the market. Smaller institutions, placing an emphasis on local decision processes and strong ties to the business owner, rarely pursued these techniques. It is clear that small loans to this sector are a challenge to the overhead of the underwriting institution.

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Topics: Commercial Lending

Demolition Man: 1990s Pop Culture Vision of the Future, Realized

Posted by Deborah Matthews Phillips

Sep 27, 2017 12:15:00 PM

Hollywood’s dystopian genre chills and thrills us by incorporating revolutionary technology into its vision of the future. The film industry at the turn of the 21th century produced several legendary examples, such as Minority Report, Blade Runner and Running Man.

One of my favorite films from this crop is Demolition Man, a cornucopia of 1993-era kitsch and knock-‘em-up action. In case you missed this one, here’s a plot summary: In the late ‘90s, southern California is engulfed in a crime war. Both Simon Phoenix (Wesley Snipes), a despicable villain, and John Spartan (a wrongly convicted cop played by Sylvester Stallone), are incarcerated in ice in a CryoPrison, suspended in time. The story takes place in post-apocalyptic 2032, when Spartan is thawed out to recapture the evil Phoenix and awakes to a completely different world.

Despite the fact this movie was made almost 25 years ago, there are numerous examples where this movie “got it right” by accurately and seamlessly weaving futuristic technologies into the storyline.

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Topics: Tomorrow's Technology

Real Face Time: Conferences Deliver What Devices Can’t

Posted by Susan Griffin

Sep 22, 2017 11:30:00 AM

In our busy digital world, we often forget the importance of being in a live setting and networking with others from the financial services community. In fact, the benefit you get from attending industry conferences might be just what you need to discover new ways to motivate your business and promote growth in your financial institution.

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Topics: Commercial Lending

Are You Ready for Real-Time Banking?

Posted by Jennifer Geis

Sep 13, 2017 11:45:00 AM

For an overview and definition of real-time payments, read the previously published blog titled ‘The Biggest Misconception of Real-Time Payments’.

There is no doubt that we live in a society which values time. Innovative companies are cropping up every day to help us do things faster.

Financial services consumers are demanding not only speed, but convenience, automation, reliability, and transparency among transactions in addition to real-time funds availability. In addition to consumer expectations, drivers of this faster payment movement include technology innovation, new players and business models, business expectations, enhanced safety and soundness, and globalization and regulatory pressure. As we evaluate those drivers, many industry experts believe that financial service providers will begin to see benefits from functionality that leverages faster payments. 

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Topics: Payments, Tomorrow's Technology

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