For more than a year, banks and credit unions have been consumed by the Paycheck Protection Program. But with PPP now shuttered and businesses largely returning to normalcy, it’s time for lenders to do the same.
Where they go from here, however, remains a question for many.
While not as resource constrained as during the pandemic, banks and credit unions must remain strategic in the allocation of their finite time and budgets.
On Thursday, June 24, we hosted a customer event with leaders from a wide range of financial institutions in the Northeast region. The group included everyone from de novos to established, national lenders, with institutions ranging from $500M to nearly $13B in assets.
Over the course of an afternoon, these leaders talked about a number of topics that are top of mind for them as they make the pivot away from emergency response and back towards business as usual.
The Top 4 Goals and Strategies for Lenders, According to Numerated Customers
Below, we’ve compiled the four goals and strategies primarily discussed during our recent customer summit.
- Using technology to increase branch efficiency: For most of 2020, social distancing guidelines and mandated lock downs kept branches closed. The silver lining for banks and credit unions was the ability to shift those employees to focusing on PPP lending. Now, with branches back open, banks and credit unions are looking for ways to optimize efficiencies out of these brick and mortars.
One strategy they’re deploying is adopting digital lending platforms like Numerated to empower branch employees to build deeper relationships with their customers. For example, some lenders are using Numerated to quickly score loans and lines of credit up to certain thresholds, like $100,000. These products can be expedited at the branch using a digital lending platform, leaving more time for credit teams to work with the largest loan applications.
- Using technology to catch up in secondary market segments: The pandemic, and PPP in particular, have banks and credit unions reassessing their balance sheets. As a result, some financial institutions that have built their reputation in one segment--for example, large commercial loans--are realizing they need to give some TLC to secondary segments, such as small business lending.
These institutions are evaluating digital lending platforms that can help them establish their presence and grow within these secondary markets, without putting new strain on their current talent pool.
Platforms being considered by these institutions put a premium on the customer and banker experience, making it easy for any team member to become a small business lender.
- Using technology to make SBA lending more efficient: PPP has had some interesting side effects on the bank/small business relationship.
As one bank leader described it, borrowers are now more aware of SBA loans than ever before, but they are not necessarily more educated about them.
With PPP now closed, SBA loans are becoming a top option for businesses still in need of government-backed loans. Unfortunately, these loans can be incredibly cumbersome for all involved.
Some banks and credit unions said they plan on adopting digital lending platforms that can expedite and even fully automate SBA loans, allowing their teams to spend more time educating borrowers on these important financial tools.
Lenders deploying this strategy will also be able to take advantage of temporarily increased caps and guarantees on SBA 7(a) Express loans. - Using technology to meet customers' shifting expectations: Our customer summit was filled with a plethora of interesting conversations and critical insights into bank leaders’ current mindset. But one comment stuck out above all the rest.
While talking about the need for digital transformation moving out of the pandemic, one bank talked about an unintended consequence of using a digital lending platform during PPP.
“We’ve created a monster,” were the words used when describing the expectations customers now have of every business banking product this institution offers.
This sort of shift in customers’ behavior was felt by all in attendance, and underlined much of the discussion during the customer summit. Regardless of stated goals or strategies, somewhere within every bank or credit union’s game plan was an understanding of a need to meet these new expectations.
Get More Insights from Bank and Credit Union Leaders
While the next customer summit has yet to be set, you don’t need to wait for an invite to get insights like these from industry leaders.
During our Tuesday Insights Sessions, we’re constantly inviting customers and industry thought leaders to talk about their strategies, how they’re approaching industry trends, and different ways they’re using technology to make business banking easy.
You can rewatch our latest Insights Session featuring Bremer Bank Chief Strategy Officer Dan Flaningan here, or register for our upcoming session by saving your seat here.
