7 Strategies for Achieving Balanced Loan Growth – Parts 3 & 4

On our blog, we’ve been covering different strategies for balanced loan growth. Today, we’re going to give you parts three and four in one!

If you need to, you can find part one and part two to get caught up. 

Strategy Number Three - Deal Pricing 

Further understanding commercial relationships enables your financial institution to optimize for growth. Banks and credit unions must invest in a loan origination system that makes loan origination easier by reducing time-consuming processes and improving consistency in pricing. This type of loan origination software has the added benefits of risk mitigation and regulatory compliance as well. Your loan origination system should serve the needs of both business and consumer lenders.

Strategy Number Four - Efficient Loan Origination

The ability to leverage multiple data sources like their CRM, core, application, pricing, and additional third-party data all in one loan origination platform will help ensure that loan decisions are consistent and efficient. Prefilling loan applications with applicant information decreases the amount of data entry and training required and reduces the potential for errors. This will also help you understand the connections between your small business and commercial lending clients. It’s critical to gather and maintain the historical insights from your growing small businesses help nurture a profitable future commercial relationship.

Commercial Lending

A commercial loan origination system enables an optimized credit approval process and should leverage workflow automation and business rules. A commercial loan origination solution should help address all commercial lending needs in a single, integrated platform that allows the institution to manage the entire commercial lending process, improve regulatory compliance, mitigate risk, grow and develop client relationships, and drive underwriting efficiency. This empowers their commercial relationship managers to meet the more complex needs of their commercial clients and grow their client wallet share.

A loan origination system creates consistency and provides the framework for a financial institution to automate, integrate and streamline the entire commercial lending workflow. A commercial loan origination solution can handle all the different types of commercial loans and address their unique needs.

It can also mitigate risk by developing a complete insight into complex client relationships with aggregate exposure and deposit data. This allows the bank or credit union to manage any changes in their clients’ ability to meet their obligations. Being able to group prospect and client relationships allows you to identify and understand any exposure concerns.

Consumer & Small Business Lending

Streamlining consumer and small business lending processes should also be a focus for banks and credit unions. An effective loan origination solution empowers institutions to process applications, easily track the effectiveness of their processes and generate insightful reports.

For small business lending, your loan origination solution should help manage business credit requests of all sizes faster and with more consistency. This will minimize portfolio risk as well as other benefits including streamlining operations, enabling analysis based on credit policy, integrating financial statement analysis, and expediting loan application decisions. 

Gaining a complete view of every applicant drives quality lending decisions. A loan origination system should aggregate personal and business financial data to support multiple decision strategies and processes for business loan applications. Depending on your grey area strategy, this includes scored or non-scored/judgmental lending decisions.

In consumer lending, the volume of loan requests means that financial institutions must process loan applications quickly and at competitive rates – while controlling credit risk. This means that your loan origination solution should integrate your credit policies into your decision processes in order to mitigate risk and make sure you are always in compliance.

For your consumer loan origination solution, your financial institution must look for an automated solution with a full range of credit reporting that provides a single point of origination. Like in commercial and small business lending, banks and credit unions must automate the entire lending application process from application submission to booking and reporting.

Creating efficiency across your loan origination workflow is all about how you can access and gain insight into data while providing more consistency in your credit decisions. In our next blog post in this series, we’ll be taking a look at how this data will also help you turn CECL into a strategic business initiative.

Stay tuned for the next installment in this series. If you’d like to learn more now, download our full eBook with all seven lending strategies.

Author Bio

Baker Hill empowers progressive financial institutions to increase revenue, reduce risk, and drive more profitable relationships.

Streamline business, consumer direct and indirect lending with our common origination platform. Understand profitability and risk at every level with our sophisticated business intelligence and analytics. Monitor and maintain a healthy financial portfolio with our statement analysis, exception, and risk management solutions.

Explore our solutions below for more information on how to generate sustainable growth, minimize risk and increase profitability.