A Georgia bank CEO was recently quoted as saying that he doesn’t “need technology that is going to help make more loans,” but technology that will “help make the loans [he’s] already making more efficiently.” His comments represent a much larger discussion about the the role of financial technology to either disrupt the banking industry or enable banks to respond more quickly to changing consumer expectations for things like speed and convenience. While non-bank financial startups are centered around technology and exploring how it might revolutionize banking, banks are trying to understand how technology can impact their existing operations and customer experience.

Specific to commercial and small business lending, there are five key areas where banks can incorporate technology to position themselves for improved performance, service and longevity given today’s market conditions and competitive factors:

Measuring financial efficiency
There are two ways to measure efficiency; the first is the financial definition of efficiency, or the efficiency ratio. The second is the practical type, characterized by shortened turnaround times, faster processes and easier methods. Both types of efficiency can be influenced by technology, but the current lending landscape calls for more focus on the latter. Using technology to speed up processes and eliminate waste will ultimately create higher and more consistent profits, a more resilient risk profile and employees empowered to make better decisions.

Achieving efficiency through auto decisioning
In an era where the rise of alternative lenders has prompted customers to demand instant action on loan queries, banks must be able to quickly and accurately deliver loan verdicts. By implementing auto decisioning technology, banks can more effectively compete against digital-platform lenders, and then grow that business. Banks’ advantage over non-bank lenders lies in their funding stability and mindfulness of operational compliance. Getting up to speed—literally–in delivering quick, smart loan approvals can give them a big boost.

Embracing the digital relationship with business customers
Banks have an opportunity to leverage technology solutions to not only better connect with their current customers, but also to attract new ones by supplementing face-to-face interaction with digital tools. Arm bankers with tools in the field so that they may meet customers where they are, and perform the same functions they could in-branch. And provide customers with a digital channel so they can track the status of a loan or complete and return important documentation from their home.

Engaging in treasury management opportunities
Treasury management is a valuable business for banks, and an area that many experts predict will have an expanding role in coming years. However, the onboarding process can be a very complex one encumbered by manual processing and poor workflow management. Transitioning to electronic documents for onboarding and seeking to automate pricing, approval and even status tracking will offer significant rewards to banks’ commercial transaction goals.

Acquiring and retaining the right talent
In recent years, the industry has experienced an alarming trend in young talent either not being interested in banking or unexpectedly leaving the industry. A large factor in this decision is banks’ hesitation to replace dated legacy systems in favor of new, cutting-edge technologies. Employees want to work in an environment where the systems they use mirror the technology user experience they have in their personal lives — intuitive, streamlined and empowered.

I predict 2016 will be the year when bankers more completely embrace technology and view it as a tool that will take their institutions into the next generation by allowing them to do the same things they’ve always done, but with much greater speed and efficiency.


Jonathan Rowe