Are you an Olympian in the 'lending arena'?

The right game plan, the right platform, and the right attitude along with respect for rules can turn your bank into a lending Olympian

Published: 17, Oct 2016

The author is senior vice president, technology, Newgen Software, which is a pioneer in the Digital Transformation space. For over two decades organizations have relied on Newgen’s innovative technologies and solutions to drive smarter business decisions. Newgen through its proven Business Process Management, Enterprise Content Management, Customer Communications Management and Case Management platforms brings about the perfect amalgamation of information / content, technology and processes; the building blocks of Digital Transformation. Newgen’s commitment is towards enabling clients achieve greater agility when it comes to transforming processes, managing information, enhancing overall customer satisfaction and driving enterprise profitability. This philosophy and commitment forms the guiding fundamentals of the organization’ and the basis of its Mission and Vision. Headquartered in McLean, Virginia, Newgen Software Inc. was incorporated in 1997 with a view to grow business in the North America market. The company is credited with large, mission-critical deployments at the world’s leading banks, insurance firms, BPOs, healthcare organizations, government agencies, telecom companies, and shared service centers. Newgen Software Inc. is a wholly owned subsidiary of Newgen Software Technologies Ltd. – Leader in ECM, BPM, CCM and Case Management space. Newgen is certified /appraised for ISO 9001:2008, ISO 27001:2013, CMMi Development (v1.3) Level 3 and CMMi Services (v1.3) Level 3. The organization has a global footprint with over 1300 installations in more than 61 countries.

Unlike athletes who have four years to strategize for the Olympics, banks need to act and now with a game plan in tow! (Photo: Shutterstock)
Unlike athletes who have four years to strategize for the Olympics, banks need to act and now with a game plan in tow! (Photo: Shutterstock)

Synchronised thudding heartbeats, gushing adrenalin, ticking clock, splashing water and a tense stadium. Spectators looked on as Milorad Cavic and Micheal Phelps battled it out in a nerve wracking duel in the water. Inching closer to the finish line at the 100 m butterfly at Beijing Olympics 2008, Phelps beat Cavic by a mere 4.7 mm! A roaring crowd and the world celebrated one of the greatest Olympic and swimming champions in history with more Olympic gold medals (19 at the end of Beijing’08 and 23 after Rio’16) than any other human. Tense, exhilarating and mind-boggling moments like this are not created by chance. For, as Bobby Knight (basketball coach for US '84 Olympic team) rightly said, "The key is not the will to win. Everyone has that. It is the will to prepare to win that is important."

On the podium, get the gold
The much-awaited Rio Olympics arrived and plunged sports lovers into a month long sporting extravaganza. So what is it about the Olympics that makes it the Holy Grail of sportsmanship? Well, if you delve into its history, Olympics is what makes dreams come true. It is a potpourri of dreams, culture and a spirit of sporting excellence that reverberates across nations. It is the one unified platform that gives an opportunity to sporting talents across nations to participate, compete and excel. Sporting talent needs to be identified and nurtured right. Infrastructure, equipments and mentors play a big role in thrusting ordinary into the extraordinary. For, a Phelps would not have been a Phelps without a Bob Bowman.

Sports is a tremendous teacher. It teaches one how not to buckle under pressure. It is a lesson that can be applied across all walks of life, including for businesses and industries. And, businesses like banks that are under constant pressure to quickly meet business needs for capital and be profitable at the same time, can learn a thing or two from the Olympic chronicles.

Keep the cauldron burning
Unlike athletes who have four years to strategise for the Olympics, banks do not have a buffer period. Instead they need to act now with a game plan in tow!

Since the subprime crisis of 2008, banks have adopted a cautionary mode which can be a deterrent to growth in their core lending business. Constant regulatory changes such as Basel III and KYC/AML norms among others have made banks jittery of risk taking. Preparation is key to tackling such circumstances. As athletes need to consistently build their stamina, their base strength and cardiovascular strength, and prepare their body for unforeseen injuries, banks too need to prepare for unforeseen circumstances. Imagine athletes not training enough for fear of injury!

Instead of being risk averse, managing risks with a game plan will be a smart move for banks to up their 'lending' ante.

Stirring up the dust or biting it?
Keep your game plan up: Banks need to change to evolve. Period. An athlete will whittle his muscles if he did not improvise on his training. Do not let your bank whittle under the burden of your legacy system. Listen to your customers. They need you to be faster, consistent and reliable and your legacy system is not allowing you to do that. Adding layer upon layer of additional applications on top of your existing core banking system to tackle individual processes is creating disjointed processes and what you have left is a house of cards!

Timing it right: An athlete aspiring for the Olympics might train incessantly for four years; however, one wrong move, one wayward glance, one misplaced calculation and four years of blood, sweat and toil goes for a toss! Right timing, you see, decides which side of the finishing line you end up on. And, chances are, by the time you finish reading this, your loan officer will have wasted a significant amount of time manually processing a loan application. He might take another day or two to collect the documents, check the applicant credit score manually at 10 different sites, download the results, then send over his findings via email to the credit analyst who then enters all details in a spreadsheet, makes a credit note and sends over manually to the LO. Phew! What a waste of time when your competitors are granting loans in a matter of minutes! Any thoughts on where you are from the finishing line today?

It's teamwork all the way: No one wins by himself. Well yes, the passion, the dedication and the effort individuals put in for preparation for the Olympics is individual, but nothing beyond that works in a silo. It's a well synchronised effort of the individual, the coach, the right infrastructure, the training and of course the support from well wishers that sees them first across the finishing line. Now think what your siloed work processes are doing to your lending business: Duplicate data entry, time laggard, inefficiency and disgruntled customers are all a fallout of the innumerable applications that you have built around your legacy system! Your loan officer, credit risk officer, credit analysts are using different applications at different points of time and none have the visibility of the pending tasks, alerts, actions to be taken. And, to top it, important decisions might be exchanged on emails which everyone conveniently forgets to keep a track of! Goodbye auditing!

Play by the rules! When Lance Armstrong had to return his bronze medal from the 2000 Olympics for doping, it went out as a strict reminder to the sporting fraternity that rules are rules and you will be penalised if you are found flouting them. Many banks in the past had attracted hefty non-compliance penalties, and adherence to compliance has been set as a priority for all banks.  Changing regulatory norms evoke strong reactions from within the industry. With the result that banks started avoiding risk altogether. All of a sudden, banks were in a sea of regulatory compliance that they were struggling to adhere to. With vigil bodies keeping a close eye, growth seemed a wayward thought. Most banks, especially SME and community banks, were manually applying the regulations which led to needless complexity in their functioning.

Faster, Higher, Stronger (Citius, Altius, Fortius)
The Olympics is a global unifying platform that celebrates sporting excellence. Now imagine a unified lending platform for banks that takes care of end-to-end lending needs, addressing all its pain points. A platform that:
•    Helps banks leverage its existing investments in core banking system by integrating with this layer and extending flexibility and scalability to the system
•    Automates all banking processes, makes processes paperless reducing errors drastically
•    Achieves seamlessness by connecting all siloed processes, doing away with the multiple application layers, giving a uniform view/visibility of processes/tasks/steps to stakeholders
•    Automates application of business rules making straight through processing of application requests a reality by reducing application review time to below 20 percent!
•    Manages, tracks, analyses processes

SME and community banks are captive to the mindset that it takes a lot of investment to transform their bank lending processes. As we know, it is the will to win that matters and preparation to transformation is the key. A strategic decision to improve technological infrastructure can catapult banks to the league where ordinary fades into the extraordinary. The right game plan, the right platform, and the right attitude can turn your bank into a lending Olympian. Pursue excellence while being risk ready. For as said by Muhammad Ali, "He who is not courageous enough to take risks, will accomplish nothing in life."

-By Ashok Kapoor, Vice President - Marketing, COE & Product Management, Newgen Software Inc.

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