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How agile can lending and advisory capabilities be?

The response of the UK government, like many others, has been opening up government backed loan support for businesses. As of the first week of June, over £31bn has been borrowed, although the Coronavirus Business Interruption Loan Scheme (CBILS) has an approval rate of only around 50%.  

The government’s alternative scheme prepared for smaller businesses and sole traders, the Bounce Back Loan Scheme saw quick update, with over 69,000 loans approved in the first 24 hours of it going live. This was unsurprisingly faster due to the 100% government-backed guarantee of Bounce Back as opposed to CBILS’ 80% guarantee – indeed through CBILS provisioning banks have to think more carefully about whether the business would be able to repay before granting a loan.

Successful loan rollout has differed between CBILS and Bounce Back. However, what is clear about both schemes is that teams responsible for processing applications are under pressure to ensure loans are granted as quickly as possible to legitimate claimants who are likely to have the ability to pay back the loan. The overall slow start to providing financial aid has highlighted the challenges facing lenders in adapting to changes and the sudden increase in workload due to COVID-19.

Key challenges for banks

Banks remain behind in their digital transformation efforts. They still have to deal with siloed activities and channels and have a varied set of servicing needs that they carry out manually, leading to friction and poor customer experiences. This means the unique needs of clients in crisis circumstances cannot be adequately addressed and the banks have an inability to quickly adapt processes and policies. A few banking clients I talked with expressed how they had a choice to either adapt and ‘break’ their current lending process or set up a new process to fit with the government timelines. The challenge was two-fold, both systems set up as well as education of teams interacting with customers and dealing with the new processes.

All these challenges show there is a clear digital gap in enterprise technology – businesses that haven’t upgraded their technology from legacy systems to a modern architecture are realising they cannot be as agile as they need to be. This in turn limits the ease with which they can get teams up to speed on new processes.

Improving agility

Lending and advisory can be made more agile using low-code applications, case management and intelligent automation which has already shown success for organisations around the world since the start of the coronavirus crisis. For example, the Bavarian Ministry in Germany is using a highly configurable platform to create a faster application process that will provide relief to small and medium-sized businesses across the state. Using the solution meant that very quickly by March 31, 229 million euros had already been paid out to applicants who would otherwise have been forced to wait for the results of a manual application.

Low code is a visual approach that allows IT and business to collaborate on designing the portions of the customer journey that are tied to immediate outcomes. Software and citizen developers can then quickly tie those journeys both to front end channels and user experiences and back to existing systems that store key data sets and transactions. By bringing IT and business together in a collaborative way, banks can accelerate the path from idea to application and build a framework for rapid agility and change.

Case management provides a means for organisations to capture, track, manage, and automate work, even work that is distributed across teams and systems. Again, in the case of the Bavarian government, applicants fill out the online form so that the data is saved digitally from the start and is easily accessible to the checking and approval process team. There are built in checks and a full audit trail, important in ensuring the right actions are taken.

Intelligent automation supports teams in completing cases as quickly and efficiently as possible, for example by automatically transmitting payment information to the right system and notifying applicants of the status of their request. This makes it easier for companies to submit requests for financial assistance and takes some of the pressure off governmental administration teams, as a lot of the time-consuming parts of application processing are automated. With the example of the Bavarian government’s use of this technology, the result is that it can provide applicants with the support they need as fast as possible.

To improve lending and advisory capabilities in future, banks need to harness these three technologies, particularly automation to connect front-end and back-end systems to streamline the entire process. Change can be delivered more rapidly to ensure more banking activities and services are fully enabled via digital channels and ensure excellent customer engagement and servicing through these channels.

Millions of small businesses and workers needed support as soon as possible in this challenging time, and this support will need to continue as long as it becomes clear that each business is able to get back to their pre-COVID state. The technology banks need to achieve this is available now and many have taken advantage of it during this period to accelerate change and help customers. Lending and advisory providers have a real opportunity to become far more agile so that they can not only help customers during the current crisis, but also help them in future by building a sustainable, transformative platform for loan provisioning and more.


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