STP Supports Cross-Selling
"You have all this information on customers in front of you on the underwriter's desk, and you can take that and sell credit products, deposit accounts and cash-management products," says Benchmark's O'Connor. "Some of the intelligence built into [lending] systems can provide recommendations for groups that are more likely to buy a given product."
"There's a lot of money to be made" in cross-selling, says First Horizon's King, who adds that the bank has made a commitment to increase cross-selling efforts. "Banks realize it makes sense to grow their business within their existing customer base, rather than trying to acquire new customers. In the mortgage process itself, by the time you capture all that information, you certainly know enough about the individual to sell them a credit card or deposit account."
Of course, a commitment to cross-selling requires the support of the entire organization. The lines of business within a bank can be very possessive of their customers and may be reluctant to share information, notes Baker Hill's Tintle. "A wall that needs to be broken down [at banks] is the ownership of clients in the various lines of business," he states. "Banks don't look at [cross-selling] as doing a good job of referring business over to another department but of losing money for your own department. Executives have to set up a new reward paradigm to maintain profitability and ward off nonbanks."
Banks also may need new ways to identify fraud and protect client data in an STP environment. Fraud always has been a problem for lenders, but increased automation could result in some red flags being overlooked, says Jason Dufner, SVP, IT content and banking systems, with Detroit-based Flagstar Bank ($15.2 billion in assets). "The data could look perfect, but it still might be incorrect or misrepresented," he says. "Fraud has definitely been an obstacle to reducing the steps in the lending process."
"Regulations and data protection are always front and center in my mind," comments First Horizon's King. "We have to make the data so accessible to employees for streamlining the business, but not so much that the wrong people can get their hands on it, too."
It is vital to find some middle ground where data is both accessible to the right people and secure, Flagstar's Dufner emphasizes. "You want to be able to take that information and make it available to your officers so they can serve the customers," he says. "But there's still a strong focus to protect the customer information, too." *
Lending Players to Create Standards for Commercial Loan Space
Open Loan Technology Standards Working Group to streamline efficiency and STP in commercial lending space.