How Finastra’s end-to-end lending overcomes the challenges for banks’ corporate lending processes

Written by John Payne Principal Product Manager, Corporate Lending
How Finastra’s end-to-end lending overcomes the challenges for banks’ corporate lending processes

The corporate lending processes in place today in many banks are slow, inefficient and fragmented—hampered by frequent manual processes, widespread use of paper documents and a lack of transparency and visibility throughout. All too often, the different steps in the process are undertaken by siloed teams, who communicate with each other in an ad hoc way using phone, email or even fax.

Challenges at every stage…

It’s a situation that’s crying out for digital transformation and integration. It’s also one that creates major challenges for participants at every stage, both within and beyond the bank:

  • Corporate borrowers are now well-accustomed to the convenience and interactivity of retail banking apps, and are seeking the same level of experience with corporate lending solutions. In particular, they want to track the status of their corporate loan applications quickly and easily, and to have fast and secure ways to submit documents and communicate with their Relationship Manager.
  • Front office RMs are hampered by manual processes, often resulting in error-prone dual-keying of information. They also have a lack of visibility into the progress of credit applications, and lack support in identifying opportunities in the current book of clients and external prospects.
  • Middle office personnel—in common with RMs—face problems with dual-keying and delays in receiving the right information at the right time. They are also having to handle increasing portfolio complexity, together with rising regulatory demands, technology barriers, outsourcing challenges and integration costs—all adding to operational risk.
  • Back office staff again face issues with dual-keying, and suffer from a lack of technical servicing capabilities to deal with increasingly complex lending requirements. Advances in front- and middle-office technology can lead to process bottlenecks in back-office functions where technology investments have lagged behind.

…create four key obstacles for banks

In combination, these challenges for all participants in the corporate lending processes add up to a major headache for banks. With the back office all too often left behind in the drive to harness new technologies, there’s a major opportunity to increase automation and digitization in this area—thereby boosting speed and efficiency, while freeing up staff to tackle more complex, value-adding tasks.

However, as banks seek to address these issues, our experience shows that their ability to effect real change is often hampered by four entrenched obstacles.

1. Lack of internalization
Banks have traditionally prioritized launching new products and enabling growth—goals they’ve achieved by adding successive new layers of product features and procedural requirements. This lack of rigor has resulted in highly complex business processes that can be difficult to automate.

2. Legacy infrastructure
Years of successive mergers and acquisitions, product launches and regulatory changes have left many banks with complicated IT architectures. Redesigning and simplifying these monolithic systems can take years and cost hundreds of millions. Major systems investments run the risk of being outdated even before go-live.

3. Siloed business priorities
IT departments can have different agendas and lack an understanding of the business priorities for lending. As a result, IT architects and solution designers may be inclined to use legacy techniques or select the most technically exciting solutions.  

4. Best-of-breed versus build-it-yourself
Banks often lack the internal capabilities needed to introduce more automated processes. The “waterfall” methodologies historically used for big projects are not optimally suited to automating business processes at high pace.

Overcoming the barriers

We at Finastra have taken a long, hard look at the challenges created by slow, disjointed corporate lending processes—and also at the hurdles banks face in trying to address those issues, both end-to-end throughout the process and front-to-back in their organizations.

If you would like to hear about how we have come up with a solution to overcome the barriers you face, contact us today.

Written by
John Payne

John Payne

Principal Product Manager, Corporate Lending

John Payne leads the product management team for corporate lending originations. For over 20 years he has been defining and delivering software solutions for financial markets. He has worked for several of the world’s largest banks in areas such as capital markets, structured derivatives and stock...

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