Understanding Your Commercial Lending Processes – Current State

Every bank wants the commercial lending processes to be more efficient. It seems that every loan processes runs into the same process issues and it seems like a simple deal that should take a few hours turns into a few days to get to closing. The process starts and stops with problems - questions being repeated, required documentation that has been received and misplaced, the same tasks repeated multiple times within the process and a myriad of other little things that leaves both the lending staff and bank clients wondering what is going on.

You know there must be a better way and think, what about automating the lending process. Great idea but automating the current lending process is more than just software. There is a misconception that automation will immediately cure all process issues but in order to gain the efficiencies through a software solution, you first need to understand the current process inefficiencies. Software solutions can automate the lending process but software by itself may not be able or should solve every breakdown and roadblock in the current process. You need to identify all issues within the current process which starts with the “what, where, why and who” of each task being performed. This understanding of your current process is the “Current State”. By understanding the Current State, those tasks that are currently making your process less efficient will become apparent.

Documenting a Current State starts with a decomposition of all lending processes. List out no more than the 10 major processes that will take you from business development all the way through to portfolio management. Under each of these processes, list out all current tasks in the order performed and who performs them. You will begin to see that the tasks performed may not be in the right order, could be eliminated, or redundant. In addition, you may see where the person performing a certain task may not have the skill set to perform these tasks. By understanding your “Current State”, you will understand where and why the breakdowns and roadblocks happen.

The results of the Current State are the understanding and insights needed when looking to improve your lending process efficiency. The results will also give you specific efficiency insights of what requirements are necessary when analyzing lending software solutions or if you choose to improve your manual processes.

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