Commercial lenders promise fast access to capital. Streamlined apps, immediate decision-making criteria and sophisticated marketing campaigns all drive prospective borrowers into their pipelines. Mission-driven lenders, while operating on a different set of principles, have the difficult task of competing with these lenders, but with the fraction of the budget. An organization’s lending system plays a critical role in their constituent’s experience. Ownership of that system begins long before go-live – it starts with selecting the right platform and implementing it with an eye towards the future. And, the system’s long-term success relies heavily on how it is maintained. Business applications require careful ownership to work effectively and lending systems are no different. When considering total cost of ownership for a system, organizations should account for the investment of time and resources in its ongoing management.
The basis for a strong ownership model is comprised of three pillars: support, operations and growth. Beyond responding to inbound support, an organization must proactively work to ensure stable operations. And, to meet ever-changing needs it must be positioned for continuous growth. In this post, we will explain how the support, operations and growth approach can be used to manage your system in a lending-specific context.
Supporting Complex Lending Systems + Processes
Lending is complex, and as a result its associated systems can also be complex. CDFIs need an effective means to collect, triage and prioritize inbound support tickets to resolve issues. For CDFIs, support tickets can take the form of simple requests such as resetting a user’s password, adding a new field or changing picklist values. Or, they can be complicated tasks like fixing Metro2 reporting, updating significant portions of the loan evaluation criteria, or implementing a new loan program. This becomes even more involved when various systems and partners are integrated into a single business process. Ensuring an organization is able to support this level of complexity requires a well-maintained process brought together through strong support resources.
For example, a CDFI with a multi-app solution once noticed that some customer household budgets, which met minimum net income criteria, were being rejected. To troubleshoot, Craftsman investigated the client portal and their back-end Salesforce system to determine the cause of the rejection. After careful review Craftsman discovered that applicants were able to change the budget post-submission. The issue was resolved by modifying the portal to prevent post-submission changes. As a result, budgets that did not meet minimum net income criteria were appropriately rejected. Those clients automatically received the correct correspondence pointing them to resources on how to improve their household finances. For the CDFI, time could be appropriately spent on clients who met the minimum criteria.
Stabilizing Lending Operations
Given the amount of time and resources that go into solution support, it may be difficult to imagine that there is any time left to focus on operations – especially proactive efforts to ensure the operational integrity of systems. However, this pillar is as important as day-to-day support, and can even alleviate that queue if approached strategically.
CDFIs need to invest time and energy in maintaining their system’s production and test environments when new releases and upgrades become available. These upgrades will address known issues and add additional features. Focusing on other operational aspects such as data management and integrity (e.g. duplicate removal) will improve the quality and accuracy of information. Reports and analytics which demonstrate impact to funders, partners and other constituents will be cleaner and easier to generate. Ongoing attention to how the systems are administered will ensure that key loan data is secured as far as users are concerned. And, an effective change control process will create a clear record of changes and testing, thus mitigating risks.
CDFIs that leverage the Salesforce Lightning Release Upgrade are a strong example of organizations that proactively stabilize operations. These CDFIs experience a sleeker, more user-friendly interface, and leverage the following enhancements for greater efficiency:
- Ability to mark favorite pages for quick access
- Customizable paths that follow specific lending processes (e.g. stages and sub-stages)
- “Guidance for Success” pointers provide staff members with specific instruction at each stage of the lending process
- Automatic activity capture keeps track of associated emails, calls and tasks
- Improved reporting and dashboards for internal management
- Advanced metrics for to external partners or funders
Growing a CDFI’s Systems
The mandate for a CDFI is to grow and its systems must be positioned accordingly. Enhancements should respond to, and even anticipate, the ever-changing demands of constituents. The key is aligning systems to the CDFI’s growth plan – investing in improvements that will enable the organization to achieve strategic goals that span multiple years. Any enhancement must have a vehicle to ensure its timely delivery. And, as part of delivery, the enhancements must integrate into the CDFI’s body of knowledge to ensure end-users can fully adopt the outcomes.
CDFIs that are growing their client base require systems that extend their reach, such as online applications or portals, and that streamline lending processes for efficiency. For example, On the Road Lending (OTRL) is using their lending ecosystem to propel growth in three additional states. To do so, OTRL automated regional categorization of applicants based on zip code and tied to criteria such as disaster region and county. They also implemented automated functionality to stabilize their portal applicant license count, since their exponential growth increasingly led to reaching their license limit. These growth improvements, combined with efforts to streamline their lending path, enabled OTRL to take on more applications from the additional states without adding significant headcount. The growth led to increased funding, and ultimately greater impact.
Summary + Conclusion
Lending systems are at the center of CDFI business processes – playing a role in the origination pipeline, qualifying applicants, disbursing loans and managing repayment. Using the support, operations and growth approach, CDFIs have the capability to effectively maintain their system by addressing inbound support needs while simultaneously and proactively maintaining operations to prevent downstream issues. Additionally, CDFIs should work towards constant growth – identifying the most important enhancements to support their strategic plan. The way that a solution is managed is as critical as the solution itself, and can be a leading factor in driving an organization’s impact.
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