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Taming the Monster on Your Desk

Posted by Patrick True

Feb 9, 2018 1:30:00 PM

According to a recent study by the RadiCadi Group, the average person receives 121 emails a day while sending 40 emails in the same time span. There is no doubt that more people are competing for our time each year. This can often lead to a sense of overwhelming stress in our workplace when we cannot seem to keep pace with the glut of information we face every day. 

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Topics: Information Technology, Commercial Lending, Small Business Market, Lending, Data, fintech

Pay No Attention to That Credit Officer Behind the Curtain

Posted by Patrick True

Jan 26, 2018 1:40:00 PM

As a risk manager for a company that licenses financial technology, you might assume that I would be a huge advocate for the latest and greatest algorithmic tools to automate small business lending decisions. Without a doubt, technology exists today to access enough information to make an informed decision regarding almost any form of commercial credit. That said, I am extremely cautious about such thinking. I believe strongly in the use of technology to enhance the credit decision process and create efficiencies. But I also believe there is a marked difference between automated credit decisions and credit decision automation. The first produces a credit decision based solely on data. The second uses data and enhanced workflows to facilitate credit decisions in an efficient manner, thus saving cost and increasing profitability. You must ask yourself a simple question. What is the smart credit decision? Simply put, it is the decision that is right for your institution.

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Topics: Commercial Lending, Small Business Market, Lending

Fintech and Payments Trends to Watch in 2018

Posted by Dave Foss

Jan 17, 2018 11:00:00 AM

Financial services have recently been in the national spotlight for everything from crypto currencies to data breaches – and a lot more in between. There is a shifting focus toward an enhanced customer experience, automation and security that has ushered in many new and interesting technologies. As the industry continues to keep pace with change and disruption, financial institutions must sift through the hype and pay attention to the most impactful and relevant technology movements in order to remain competitive. Below are some areas to watch in 2018.

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Topics: Financial Services Industry, Risk Mitigation, 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

Loan by Robot?

Posted by Jonathan Patrick

May 10, 2017 11:30:00 AM

Does “Robo-advice” Include Lending?

By now, financial services consumers have gotten used to the idea of a robot handling their money. In fact, according to Accenture, seven out of 10 consumers even welcome “robo-advice” for their banking, insurance, and retirement services.(1) So clearly, consumers are at least open to the notion of a robot handling their assets – but what about their liabilities? Are consumers ready for a loan processed entirely by a robot?

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Topics: Lending, Tomorrow's Technology

People, Process, Product: What if “the Profit” Paid a Visit to Your Bank?

Posted by Clarke Farmer

Dec 28, 2016 11:30:00 AM

One of my favorite TV shows is CNBC’s The Profit. In the show, Marcus Lemonis (aka “the Profit”) invests and partners with small businesses that typically need dramatic changes to their business model in order to improve performance and profitability.

The Profit’s method focuses on three primary elements: people, process, and product. It is quite entertaining. The people he gets involved with are usually even more interesting than the business challenges faced in each project. I suspect that any banker who has seen the show can nod their head and chuckle in agreement that many of their commercial loan customers fit a similar profile.

That said, do you wonder what the Profit would say if he paid a visit to a community bank? We may never know, but here are a few thoughts specific to the commercial lending side of the shop.

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Topics: Financial Services Industry, Lending

Stand Pat and Starve. Diversify and Thrive.

Posted by Mark Messick

Nov 16, 2016 11:15:00 AM

Because of the recent scrutiny over commercial real estate concentrations and lower-than-expected yields, financial institutions (FIs) have been searching for ways to grow loans and raise profitability. Unfortunately, aside from consumer and commercial and industrial (C&I) lending, lenders don’t see a lot of options. In fact, with the onset of poor performance in the consumer loan space, many FIs have chosen to make business lending a priority. And then a slowdown in the economy, uncertainty about our next president, and competition for the better credits led business lending volumes to fall for the first time in six years according to the Wall Street Journal.

So what’s the response?

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Topics: Lending

How Information Technology Helps Create Credit ACE’s Within Your Institution

Posted by Patrick True

Jul 20, 2016 10:54:08 AM

Years ago, I introduced the Credit ACE acronym to describe a credit officer’s skill in managing a commercial lending portfolio. To be an ACE means to Anticipate potential future events and actions, to Communicate effectively with your clients and to Enforce legal agreements appropriately. Since the acronym was first used, advances in information technology have widely enhanced those capabilities. By working with financial technology vendors, financial institutions across the US are beginning to aggregate their financial data in order to see more clearly into each business relationship. From on-line applications and underwriting through documentation, collateral management and compliance, these institutions are beginning to benefit from seamless delivery of data from one system to the next. This will pay further dividends in the near future as institutions develop their strategies to comply with new regulatory standards associated with FASB guidance regarding current expected credit losses (CECL).

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Topics: Loan Pricing, Lending

How To Create Commercial Customer Loyalty

Posted by Clarke Farmer

Mar 23, 2016 10:00:00 AM

How many battle-tested entrepreneurs still appreciate the lenders that helped them get started years ago? The good lenders are remembered and can enjoy customer loyalty for life. Let’s talk about how to make that happen more often for your lenders.

The most obvious variable affecting any lending relationship is the rate.  Since reducing the relationship to price is a death sentence to value, we won’t talk about price in this article. Rather, we will consider a few other fundamentals that can enhance loyalty when delivered properly.

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Topics: Customer Experience, Lending

The Recent Fed Tightening: How Much Will Banks Really Benefit?

Posted by Jon Kozlowski

Jan 27, 2016 10:00:00 AM

This past December 16th the Federal Reserve finally began unwinding its extraordinarily accommodative monetary policy and raised its benchmark Fed Funds rate. This was the first such rate increase since June 2006. Bankers’ enthusiasm for higher short-term rates is well-founded, but caveats abound.

The traditional view has long held that the banking industry as a whole is asset-sensitive, benefitting from rises in interest rates and being harmed by declining rates. Historically, financial institution share valuations are positively correlated with interest rates. This correlation stems from two sources:

  1. Rising rates generally coincide with periods of improving economic conditions, and improved credit conditions, while declining rates prevail in times of economic distress;
  2. Traditional commercial banks tend to have a positively-gapped balance sheet structure, owing largely to the preponderance of long-duration, stable core deposits in their funding composition.
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Topics: Financial Services Industry, Lending

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