Independent Banker - July 2021 - 67

Guest Experts:
Lending
Reimagining banking for growth: lending in the
anticipation economy
A new era of competition
Banks are facing a new
normal where technology
helps manage risk, but also
makes competition fierce and
materially raises customer
expectations. Customers know
you have their data-and they
expect you to do something
innovative with it. Doing so
demands integrated insight
that leverages alternative data, events across platforms,
and accurate predictions of behavior beyond simple credit
assessment. Bankers must understand how and why
borrowers act to make the right off ers to the right customer
segments at the right time.
To meet the challenge of the anticipation economy, bankers
will need to invest carefully in their lending capabilities.
Automating or digitizing the status quo is insuff icient to remain
competitive. Bankers must think more holistically about the
lending process and the potential technology enables. With
that potential in mind, an iterative vision for transformation
can be laid out and multidisciplinary support from sales, credit
underwriting, IT, and the executive leadership team can be
aligned to maximize eff iciency and profitability in the lending
process.
Speed to decision as a competitive advantage
Consider a common customer complaint-the length of
time required for a credit decision. Delays in the process or
the pursuit of deals that are unlikely to be approved have
opportunity costs for both the customer and the bank.
To prioritize investment and realize the full potential of
technology, our top-performing clients evaluate the following:
Sequencing: Processing steps in the wrong order or
performing steps in sequence that could be done in parallel
add to the credit decision timeline. Analytics such as dual
risk ratings, know-your-customer compliance, and Off ice of
Foreign Assets Control (OFAC) checks performed early in
client interactions enable relationship managers to focus on
the deals they can win-avoiding extended interaction with
unprofitable or overly risky prospects. One top-performing
client used this risk analysis insight to reorient its sales team to
volume and cross-sales. Instead of writing up a small number
of deals each month, sales ran numerous deals through the
scoring model, pursued the most favorable opportunities, and
eliminated wasted energy on risky prospects.
Accumulating insight: Each step in a process adds to
cumulative customer insight. Do not allow competing
analyses or redundant checks. Focus investment for a
consistent view of risk from pursuit to portfolio management.
Automated spreading, empirical risk rating, and credit
research quickly provide insight, but their full potential is
missed if information silos persist or missing feedback links
cause rework. One top-performing client standardized its
credit write-ups by asking stakeholders, " Who needs insight
for credit decisions and how does empirical data change
what we do? "
Balancing humans and tech: Customers still like to interact
with people, so do not automate away opportunities.
Empowered with automation, humans can refocus on areas
where they add value in the customer relationship. Together,
humans and tech enable scale in a process. Many topperforming
banks use workflows that allow straightforward
credits to be automatically decisioned and redeploy
underwriters to the more complex credits where expert
insight is necessary.
Technology works best when embedded in a thoughtful
process. With this framework, you can act quickly to maximize
your potential in the anticipation economy. Moody's Analytics
off ers transformative technology solutions for every stage of
the credit lifecycle, and the analytics and expertise to set up
your bank for continued success. The first step in the credit
lifecycle is origination-and Moody's Analytics can help you
originate loans that expand your margins. To learn more about
how we can help, visit us at CreditLens.com.
Chris Stanley, Senior Director
chris.stanley@moodys.com
336.302.4382
http://www.CreditLens.com
Independent Banker - July 2021

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