3 lessons for loan operations at #CommunityLIVE


Yesterday, the self-proclaimed Workflow MacGyver took the financial services stage at CommunityLIVE.

Kathleen Niswander, director at Cornerstone Advisors, has spent the last 15 years helping organizations leverage technology to improve business processes, and she’s spent the majority of that time within lending.

Niswander recently conducted a survey of loan operations professionals. The survey focused on the processes and technology financial institutions are using – and not using. She shared the survey results and her take on the findings.

Let’s recap the three major findings:

1. Financial institutions are underutilizing technology

Shockingly, very few survey respondents have adopted electronic signatures. Also surprising is that 18 percent confirmed they still need wet signatures for everything, no matter the type of loan.

It’s clear there is a high level of concern from financial institutions about electronic signature risks. This is still the case, despite the fact that the Electronic Signatures in Global and National Commerce Act, designed to support the validity and legal effect of agreements entered into electronically, became law over 15 years ago.

2. Financial institutions are retaining excess paper

It was also very surprising to hear that 14 percent of survey respondents are retaining hard copies forever.

This is a severe example of over-retention that actually puts the institution at risk, because if the information still exists, whether in paper or electronic form, they must produce it in a discovery situation, even if the institution’s document retention policy says they should have destroyed it years ago.

The costs of collecting, processing and producing electronically sorted information can be enormous and time-consuming if you’re ever served with a subpoena or notice of regulatory audit.

3. Roles will become more technical and less manual

Armed with her experience and expertise, Niswander says financial institutions will begin to think about processes holistically and not just focus on any single aspect. Customers will opt for more self-service, including remote options that will force institutions to rethink their processes and embrace new technologies.

We will see less paper, widespread electronic signature adoption, and tighter integrations between technology systems.

And the phrase “Because we’ve always done it that way” will become an unacceptable response to the question “Why are we doing this?”

So, what will your loan operations look like in the next 5 to 10 years?

Michelle Harbinak Shapiro

Michelle Harbinak Shapiro

Michelle Shapiro brings more than 15 years of experience in the banking industry to her role as Financial Services marketing portfolio manager at Hyland. Her mission is to share best... read more about: Michelle Harbinak Shapiro

1 Response

  1. Avatar Kate Barney says:

    Excellent blog. The cold truth is that the key takeaways seem to apply to all industries.

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