Lending operations have become more complicated than they need to be, especially for larger commercial loans.

With data and documentation going back and forth between customers, bankers and underwriters, as well as the multiple handovers, manual document handling and continuous rework make the end-to-end commercial credit process both costly and inefficient.

Data can also end up scattered across different systems. So, it’s common for lenders to request the same information several times – duplicating tasks, increasing paperwork and holding up decisions.

Meanwhile, credit memos that pitch the deal and assess the risks take inordinate time and effort to write. And even when the deal is sealed, there are legal documents to distribute, loans to book and credit quality to monitor on an ongoing basis.

It’s time to streamline the lending life cycle. And you can do it in three steps.

1. Connect and automate the lending process

With APIs connecting key lending systems, you will no longer need to rekey information. And as well as reducing errors and providing a 360-degree and more transparent view of data, you can save considerable time by instantaneously producing documentation such as the annual review of a facility.

For broader efficiencies, ask yourself which tasks your business could do without, like manual approval and financial spreading processes for simple loans, or covenant checking and monitoring for complex facilities.

If a process doesn’t directly differentiate your business, you have a clear choice: automate it yourself with technology – or hand it over wholesale to an expert Business Process as a Service (BPaaS) provider.

2. Track and act with continuous credit risk monitoring

As regulation moves increasingly into the governance of banking relationships, you need to not only track commercial customers closely throughout the lending life cycle, but also show you are prepared to act on what you see.

There’s no shortage of data to mine for the purpose. The challenge will be to isolate the intelligence you need from the vast quantities of information that’s available. But through a combination of automated rule-based digital technology and intuitive policies, you can whittle down the number of data points you need to monitor, proactively manage issues by exception – and present the right data to the relevant stakeholders at the apt point in the lending cycle.

3. Understand customers and stand out from competitors

Technology does more than just enable lenders to monitor credit risk more easily – it’s also key to improving service. For example, digital systems will help you increase efficiency, streamline processes, accelerate decision making and give customers more convenient channels to engage with.

But there is still a considerable need for human relationships between businesses and lenders. Importantly, automated processes not only free up time to focus more on commercial customers, they also actively create opportunities for dialogue.

Ultimately, it's about serving your customers in the way they want to be served. Whether you’re lending to a small business or providing a complex syndicated loan to a corporation, your firm can set itself apart by really getting to know the customers and offer them the right products and support at the right point in their business cycle.

Get more insights in our e-Book, The Commercial Lending Conundrum.