Independent Banker - February 2019 - 28

PORTFOLIO
fi ntechs to provide small-dollar loans. One is TrueConnect,
which helps to provide loans between $1,000 and $3,000.
Sunrise Banks sells the program to employers, who then
off er it as an employee benefi t. The technology is integrated
into the payroll system, which automates the underwriting
by pulling data like gross salary and time on the job. The
program, which allows an employee to borrow a max of 8
percent of their salary, is designed to be agile.
" The decisioning process is quite simple and fast, with
loans that can be done start to fi nish in about three minutes, "
says Reiling. Funds are then automatically deposited
to a bank account or a prepaid debit card, usually on the
next business day.
Sunrise Banks also works with Self Lender to off er cash-secured,
small-dollar loans that help borrowers to build credit
history and develop savings. Self Lender has the front-end
system in which to do the know-your-customer (KYC) and
Customer Identifi cation Program (CIP) processes, house the
loan and accept the payments. As the bank of record, Sunrise
Banks provides oversight on compliance, does the data
exchange and holds those loans on its balance sheet.
Although there are a number of fi ntech companies available
that off er dedicated small-dollar lending solutions,
another option for community banks is to use automated
processes or digital-lending platforms that streamline loans
of all kinds and sizes, from $1,000 to $1 million.
The way fi nancial institutions have traditionally processed
small-dollar loans is similar to the process they apply
to larger commercial loans. Many just don't have an effi cient
way to process small-dollar loans.
" I think the mistake that some banks are making is saying
that they don't want to spend all this time on small-dollar
deals, but they're trying to solve the wrong problem, " says
Papadopoulos. The bigger question is how to make that
lending process faster, easier and more effi cient regardless
of the loan size, he adds.
Automation can dramatically reduce the amount of time
in the application collection, review and underwriting processes.
For example, CloudBnq claims it can cut time spent
processing a loan by at least 50 percent. And in the case of
certain loan products, the platform can be confi gured to a
" no-touch " or fully automated process from end to end. That
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Independent Banker - February 2019

Table of Contents for the Digital Edition of Independent Banker - February 2019
