Improving Efficiency Ratios With Process Automation
The idea of process automation is a foreign concept to many community bankers. Even for those who are familiar with the term, many struggle to understand the benefits unless they’ve had first-hand working experience with a quality solution.
In short, Process Automation uses a computer to complete work that otherwise would be done manually. When used appropriately, it greatly reduces the amount of effort and time it takes to complete steps within a defined Business Process Flow, yielding higher productivity with lower operating costs.
A great example of Process Automation in Community Banking is the Flood Ordering process.
At many Community Banks, the Flood Report Ordering process starts with either the banker or loan assistant requesting that a flood report be ordered. For internal control purposes, this is commonly (but not always) done by sending an email to the loan processing team – a step that requires information to be keyed about the property and order requirements into the email. Next, the person responsible for completing the order will connect to the flood provider’s website and re-key the information for the order. The order is then processed by the flood company and the flood report is made available to the requesting employee. The requesting employee will then often times update a log and send the order form back to the banker. The banker will then update any relevant information on the application (yes, that’s the third time we have possibly keyed the same data). The flood report is then stored in the file, which for many remains a physical file (a critical topic for a future post). If needed, the banker (or someone on the team) forwards the flood report to the borrower. With all of the handoffs in the process, this simple request can take hours (if not days to complete).
How does Process Automation Help?
By leveraging Process Automation, a majority of the Floor Report ordering work described above is shifted to the LOS. During the initial application process, the LOS captures all of the relevant information that is required to complete the Flood Order, including the property address and borrower details. This information is passed by the computer to the the third party flood reporting firm at a click of a button. The request is automatically processed by the flood reporting firm and an electronic version of the Flood Report is returned to the banker. At this point, the LOS automatically logs the request, updates the relevant information, notifies the interested parties, and stores the document in the file repository. All of these steps are completed in about 10 seconds with process automation.
Similar to the Flood Order example, an LOS can be leveraged to effectively automate many of the lending processes within a Community Bank. Some examples include:
· Appraisal Bidding
· Appraisal Ordering
· Credit Report Ordering
· Disclosure Delivery
· Loan Renewals
· Title Report Ordering
· Tickler & Exception Management
Ultimately, Process Automation can greatly reduce the amount of human labor required to get work done. This can help a Community Bank scale more efficiently over time, ultimately driving down the Efficiency Ratio.
It’s important to note, however, that Community Banking is about relationships, not technology. Even though technology plays a vital role in shaping how we get work done, technology is nothing more than a tool in the toolbox that should ultimately be leveraged to drive improved client relationships. Too often, technology gets in the way rather than supports our efforts as Community Bankers. Process Automation, when leveraged correctly, can be an effective tool in the toolbox that greatly improves productivity and yields stronger client relationships.
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