Independent Banker - July 2020 - 27

Next: Jim Reber: 2020 will be an unusual year for portfolios
Innovation Station
By Charles Potts, ICBA
Lending during
COVID-19
he Paycheck Protection Program (PPP)
presented challenges for community banks,
but they overcame them with innovative lending
solutions that highlight the need for more eff ective
automation and a consistent user experience.
Before the digital era, community bankers and
technology providers cobbled together disparate
solutions to originate loans. The lending process
included identifying and qualifying customers,
positioning and promoting the right products
and services, and managing the underwriting
and onboarding processes. These stages often
involved diff erent solution providers.
Now, in 2020, we see new opportunities for
community banks that are considering upgrading
or expanding their lending capabilities. Technology
now makes possible integrated applications
that can reduce the number of solution providers.
As community banks rethink the future of lending
and lending technology after COVID-19, the
T
lessons they learned from the PPP loan experience
can inform the development of products and
processes. Specifi cally, community banks should:
Q Examine the processes, practices and
solutions deployed to get PPP loans into the
hands of small businesses for payroll. Evaluate
what worked and what didn't. During the crisis,
one community banker I spoke with accelerated
the PPP loan process by putting some new tools
and resources into both the hands of the borrowers
and their lenders, allowing them to connect
more effi ciently and directly. They are now considering
ways to take this model and apply it to
other products and services.
Q Explore loan digitization. Timeframes
imposed by the CARES Act meant community
banks had to quickly create a digital application
data collection process for borrowers. Although
these banks did not have a digital loan application
process in place, when circumstances
required digitization, they quickly implemented
an innovative solution.
Q Research and analyze potential partnerships
using ICBA's network of community
bank-focused solution providers, including our
Preferred Service Providers (PSPs), Corporate
Associate Members, and ThinkTECH Network
and ThinkTECH Accelerator technology companies.
These providers have been vetted to ensure
they off er unique value to community banks.
During the crisis, these companies jumped in to
support community banks with the PPP loan process,
helping them secure, for example, necessary
documentation and signatures electronically.
After COVID-19, community banks have an
opportunity to reimagine their lending practices.
New technology partners can not only bring
operational improvements and effi ciencies, but
also reduce costs and time in managing the loan
process. This aff ords the borrower a more seamless
experience and a better relationship with
their community bank.
Charles Potts
(charles.potts@
icba.org) is
ICBA senior vice
president and
chief innovation
off icer
Community banks will see increased demand
for loans from consumers and small businesses
as they look to rebound fi nancially from the economic
crisis that accompanied the pandemic.
Community banks now have the responsibility
to fi nd the most eff ective processes, products and
partnerships to best serve their communities.
independentbanker.org Q 27
http://www.independentbanker.org
Independent Banker - July 2020

Table of Contents for the Digital Edition of Independent Banker - July 2020
