Responding to COVID-19 and the Economy

Small businesses need access to capital now more than ever before.

Time is of the essence, as small businesses have the least amount of excess working capital and are the ones being hit with closures. It is important to partner with a solution that can aid in helping small businesses get the monies needed while allowing the bank to address its credit concerns.

The sharing of information across all parts of the financial institution is important. The right solution needs to allow transparency from pipeline management to operations as well as robust reporting capabilities.

Small businesses cannot wait weeks to get much-needed relief, meaning quick access to money is crucial.

• Make sure your institution is up to date on where things stand with the U.S. Small Business Administration programs to support small business lending and stimulate growth.
• Leverage a system that can streamline without increasing risk through simplifying requirements. This can be done through focusing on what you know and leveraging programs available through state and local levels. Now is not the time to try your hand lending to new industries or new lines of business where you have no experience. 
• Utilize your financial institution’s knowledge to make good, quick loan decisions to better support small businesses through the unprecedented.

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In times of fear and uncertainty, it is more important than ever to reinforce the strength and safety of financial institutions. Banks and credit unions can demonstrate leadership in uncertain times with tangible products and services. 

Now more than ever, communication is key to sustaining relationships with customers. In fact, the amount of communications to customers should be increasing. Messages of safety and soundness are applicable to all consumers, regardless of their status. Messaging content should be based on propensity and capacity, with filters in place to ensure that the respective messages are targeted to the correct audience. 

Communications should: 

• Showcase what services and products are available such as pursing new lines of credit and extending existing ones
• Provide liquidity for small businesses impacted by closures and loss of revenue
• Provide messages of calmness to help their customers remain rational throughout a time uncertainty
• Outline suitable calls to action to help give customers a clear path forward

The focus of creating touchless, digital relationships in commercial lending and cloud based financial technology must be a top priority for banks today. Many institutions have lagged in creating an end-to-end digitized lending experience but with the sudden shift to remote work and contactless banking, it’s more imperative than ever that banks and credit unions invest in relationships with expert advisors in digitalization. 

• Digitalization streamlines processes, building the foundation for a first-rate strategic plan, allowing banks to turn data into insights and then into action, creating a more efficient experience.
• Leveraging data also allows for financial institutions to put the client first, responding to inquiries faster and providing their customers with peace of mind. 
• Moving into a digital lending process provides ease of use for both customer and employee. Financial institution employees can work from anywhere, keeping the workflow moving as it should.
• Customer engagement is more seamless through digital efforts, allowing them to trust the bank or credit union to guide them through an unknown experience.

As the financial industry faces these new economic challenges, it is important to have solutions in place that can assist with understanding potential risks.

• Rather than gathering and analyzing information from a multitude of disparate systems, banks and credit unions need one efficient, streamlined solution. One that can help assess risks, monitor events within portfolios and allow for the various reporting needed for management.
• No one knows exactly how the economic forces will play out. But what we do know is that it will impact all parts of a loan portfolio. Financial institutions need to determine new tolerances of risk, determine which clients they can stretch for, and determine which standard credit underwriting items can be forgone for the time being. This can be done by analyzing the portfolio to see where there is room to negotiate and where there is not. 
• One key measure is to not only focus on origination at the cost of portfolio monitoring and management. Staying focused on good, sound portfolio management practices and being willing to expand into proactive, behavioral analyses will allow each financial institution to remain successful over time. Even with the new programs and guidelines being developed, it is still crucial to ensure that guidelines from the government are being taken into consideration to make guarantees valid and enforceable.

In the current environment, it is easy to get overwhelmed. Finding the right solution partner, along with sound policy and practices, can aid in addressing the challenges.

During a fluctuating work atmosphere, a strong technology partner can make a big difference in keeping business moving forward as normal as possible. Even without an economy downswing, solutions change over time. Updates to functionality are constant and the users’ roles and responsibilities are shifting. Making sure your team stays current with trainings and updates to the system is key for continued success.

By leveraging technology, banks can reduce the amount of manual work that goes into making sound business decisions. Your solution needs to be optimized for your team to do their best work, regardless of the location.  Banks and credit unions are only as efficient as the least efficient process, so leveraging technology solutions are more important than ever. The amount of digital transactions, communications, decisions, and workflow will only continue to increase and managing that process efficiently on both sides will increase customer loyalty.

Now is a great time to evaluate and optimize your current state by asking questions like: 

• Can we still do our jobs to our fullest in this new environment? 
• Can our customers still contact us and interact with us whenever they need to? 
• What technology are we lacking? 
• Is that lack of technology losing business or slowing us down? 
• When was the last time we updated policies or configured our database? 
• Could we use some training to better configure our workflows?