Preparing Your Institution’s Commercial Lending Landscape for 2020

Matt Johnner is president and co-founder of BankLabs. The mission of BankLabs is to reimagine banking products for the future through community-oriented technologies that create new fee income, attract deposits, expand loan opportunities and differentiate the financial institution from competitors. BankLabs believes that community banking is a way of doing business, not a size, location or traditional definition. For more information, visit www.banklabs.com.

In just two short months, we will be heading into a new year and a new decade. To prepare, many institutions are planning their budget and objectives for the next year to ensure growth and profitability. With the start of a new decade, institutions are looking for ways to better equip their team with offerings and technology to meet the needs of current and future borrowers and evolve the lending process.

There is an accelerating demand for a complete digital transformation to ensure traditional financial institutions have a seat at the table. While many have slowly crept into the digital space, there is still a lack of true transformation due to culture, fear of mistakes and because incorporating new technology can be an arduous task with several hands required to execute at a high level.

Demands for mobile technology from borrowers has heightened the need to move now on innovative but prudent tech. Especially when it comes to commercial loans where there are multiple parties involved who at times can be under a time crunch, technology has made the process easier and more manageable from anywhere and presents opportunities to increase lines of business.  Find technology that can go 100% digital, increase cycle times dramatically, provide insight that borrowers never had with spreadsheets, etc.

One of the biggest traits of the technology should be automation that meaningfully improves the borrower’s experience. By incorporating a more holistic technology, the borrower is given a guided experience that also cuts down time by auto populating relevant information and only showing them options or ‘actions’ that pertain to their end goal. This means a more customized experience and not forced to flip through tabs on a spreadsheet or paper forms.

Take construction lending for example; in this segment of the market, there has been an increased need to incorporate technology. From managing budgets, highlight draw available, tracking invoices and ensuring payments are made on time, a robust, mobile-enabled technology offering is vital for borrowers, builders and the lenders they are working with. This is especially important since most of the time construction borrowers are on remote jobsites where accessing spreadsheets and paper files is not practical. These folks use mobile solutions in their business and personal lives and want it from their banking partners.

Technology plays a vital role in minimizing the need for physical documents and a largely manual process. Traditionally, commercial lending has been a paper-based, spreadsheet-based process which makes it difficult to keep track of everything required and house all the documents.

Technology also removes a good deal of the risk of fraud and human error in commercial lending. It is often more difficult to control access to paper documents and they are easier to duplicate or even edit. Also, with the creation of any loan documents being a manual process, it is more likely that someone could put numbers in wrong, causing issues down the line.

To be a better ‘you’ as an financial institution in 2020 and to better fit the needs of borrowers deploy mobile solutions that positively impact the customer experience, cycle times, draw interest and risk.

(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Mike Sorohan, editor, at msorohan@mba.org; or Michael Tucker, editorial manager, at mtucker@mba.org.)