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Securing Success: The Future of Commercial Banking

By Jay Poole, SVP-Commercial Banking, SunTrust

Jay Poole, SVP-Commercial Banking, SunTrust

How 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.

In today’s digital marketplace, it’s more important than ever to connect with clients and make them a part of the business processes

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 Explained

Bankers 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 Banking Satisfaction Study, a strong on-boarding process can result in greater customer satisfaction, improved retention, as well as additional referrals. The study shows that a 50-point increase in satisfaction per customer can equate to a six percent revenue boost.

The Case for Business Process Reengineering

Though the industry and our clients have evolved from typewriters to laptops, unfortunately not much else has changed when it comes to certain processes at most banks, such as lending. Despite technology advances, the amount of time and paper it takes to go from loan application to closing remains extensive.

About three years ago, SunTrust took a close look at our business processes, including our sales and lending platform, to assess the current landscape and areas where we could improve the client experience. We discovered that we had many disparate, outdated point solutions that didn’t talk to each other and a loan origination system (LOS) that was not integrated with our customer relationship management system (Salesforce) at all. That led to a lot of information being duplicated in the LOS that was already captured. For instance, all the information the sales team captured related to the client and the opportunity had to be re-entered by the credit team. These roadblocks were making it extremely difficult for our teammates across the Wholesale Bank to collaborate as one team and deliver the level of service and financial expertise at the speed our clients expected.

When we began the search to replace our current LOS, we were looking for something that ultimately allowed us to connect the fragmented processes. We wanted one seamless process that would allow the transparency and collaboration we needed in order to deliver a superior product to our clients. After a careful vetting process, we found nCino’s Bank Operating System to be the best solution for SunTrust. The single, secure, cloud-based platform was integrated with Salesforce—making data capture around clients and opportunities much more efficient than in the past. Additionally, we liked that nCino provided the flexibility to adapt the technology as our business processes evolved.

Several months after deploying nCino across our Wholesale Bank, the solution now provides our teammates with a more holistic view of each client, enabling more meaningful client interactions and engagement, while reducing duplicative data entry. By leveraging this system, we’ve begun to standardize and automate the loan process, alleviating previous burdens caused by manual systems, such as inefficient redundancies, limited transparency and nearly impossible portfolio management. With our teammates in the Wholesale Bank on a single platform, everyone in the chain—from relationship managers to underwriters to credit officers— has visibility into the deal and is informed about what’s happening in real time. This increased transparency and collaboration has already yielded early success in reducing loan turnaround time. As speed has become a major business currency in the industry, this quickness provides a significant competitive advantage to SunTrust and our clients.

In today’s fast-paced, digital environment, it’s essential for banks to not only provide the products and services clients want, but deliver those products in the way clients want to consume them. At SunTrust, we’re really excited about expanding this concept into treasury management on-boarding, as well as other lines of business within the bank. As more banks start to replace outdated legacy systems and manual-based processes with the modern technology that our colleagues need and our clients expect, the future of our industry is looking much brighter.