Jan-Feb 20178How banks respond to customer engagement, growth and efficiency, regulation, and competition are inextricably linked. In this new environment, banks have realized their current processes and systems won't be able to successfully support them in the future--even as soon as the next market cycle. While banks have made strides to apply technology for operational enhancements, there remains significant opportunity for improvement, particularly around optimizing the commercial lending process and the on-boarding of commercial clients.Today's systems are still largely decentralized and bogged down by manual processes and paper documentation. Commercial lending can trace its shortcomings back to legacy systems; systems that are inadequately updated to reflect current market trends and also fail to meet customer satisfaction demands.To ensure business sustainability and secure a competitive advantage, banks must consider the future of their on-boarding and lending processes. Their ability to drive revenue and build stronger relationships depends on it.Challenges ExplainedBankers must grow their digital engagement with customers. As innovators such as Amazon and Google have become the benchmark by which clients have come to judge all interactions, banks must step up their digital game to create experiences equally as intuitive.Another challenge the industry currently faces is around growth and efficiency. Antiquated, siloed legacy systems still used by many financial institutions are preventing significant competitive advances and optimal productivity. This serves as a major roadblock to their key initiatives, including digital engagement, leveraging data in meaningful ways, and tailoring offerings to best meet the needs of clients.Compliance can sometimes present a challenge to banks due to the extra staff hours and expertise generally needed to fulfill requirements. By embedding compliance into workflows throughout the organization, banks can be more proactive and ensure the most effective use of time and resources.The competitive landscape is becoming increasingly crowded. While other financial institutions are still most often a bank's biggest competitor, alternative lenders have gained market share; in fact, they funded $6.6 billion in loans in 2015 in the U.S. alone, up 128 percent from the previous year, according to a report published by BI Intelligence. We know that when clients apply for credit, they want two things. They want a fast decision, and they want money in their hands as quickly as possible. So while the alternative lenders' cost of funding is high, they're able to render instant decisions and expedite access to funding, all in a convenient, digitally-optimized experience--catering to what commercial clients care about the most.Challenges Translate to Customer Frustrations In today's digital marketplace, it's more important than ever to connect with clients and make them a part of the business processes. Similar to tracking a package or your pizza order, clients expect to know in real time where their request stands, what the next steps will be and what they need to do to secure the product or service they desire. With clients' lack of visibility into commercial processes, this disparity can cause discontent in the client relationship.However, there is a better way. According to a 2015 JD Power Retail Securing Success: The Future of Commercial BankingBy Jay Poole, SVP-Commercial banking, SunTrustJay PooleIn My Opinion
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