Optimizing a Bank’s Scored Lending Process Before System Migration
Problem
A regional bank was preparing to launch a new Loan Origination System (LOS) and needed to develop requirements for migration. This included their scored lending process, which was not optimized, and thus not suitable for migration to a new system. Ideally, scored lending requires little-to-no underwriting effort as it leverages information from the loan application, pulling a credit score and other data without relying on multiple customer touchpoints or internal hand-offs. This was not, however, the system the regional bank had in place, and they recognized an opportunity to make improvements to the process before they migrated to the new LOS.
Approach
Excelerate began with stakeholder interviews to understand the current state of the scored lending process for secured, unsecured (non-real estate) and secured (real estate) loans. With that information in hand, Excelerate then held a current-state process mapping workshop to identify major pain points and opportunities for improvement. Wanting to ensure continued collaboration with the client and their teams, Excelerate then held a future state process design workshop, integrating and synthesizing not just stakeholder’s impressions of the current system but more importantly their vision for improving it.
Results
The current-state evaluation process identified seven roadblocks that limited the bank’s ability to transition to a full, auto-decisioned scored lending process. Excelerate then created a future state process map for each of the three loan types to push through these roadblocks. Excelerate further uncovered inefficiencies with the up-front application process, where applications were often submitted incomplete and thus required multiple touch points. Excelerate built a future state process map to mitigate this, offering a new application process that leveraged online tools to streamline the questionnaire and reduce the number of handoffs between customers and internal teams. Finally, Excelerate developed a RACI that outlined ten different stakeholder roles in the scored lending process across seventeen key tasks and sub-processes.
Armed with a current and future process map as well as clearly defined roles, the bank optimized their scored lending process before migrating it into their new LOS. Understanding the danger of bringing a suboptimal process into a new system, the bank rightly pumped the brakes and brought in Excelerate to ensure they were not putting worn out tires onto a brand-new car.