When Stillwater National Bank ($1.5 billion in assets), a commercial lender based in Stillwater, Okla., suffered some volume losses in its consumer lending business, the bank looked for a system that would enable it to grow its consumer lending business, but without committing extensive resources to this area. "We are a commercial bank, so consumer lending isn't in the forefront for us," explains Janette Van Meter, underwriting manager, Stillwater National Bank. But, Van Meter continues, it still is part of the bank's lending portfolio.
At the time, the bank already was housing its credit scoring model on Fair Isaac's (Minneapolis) Credit Desk system. But rather than upgrade to the vendor's more costly Liquid Credit system, Stillwater National decided to consider some alternative solutions.
In August 2002, Stillwater National deployed Cypress Software's (North Richland Hills, Texas) Mark IV software to manage consumer credit applications. The Mark IV product, a client/server-based solution for analyzing consumer credit applications, automates the entire decision process, tracking loan applications from the entry of the application through the evaluation and underwriting process to the point of account setup and funding, according to Van Meter. "When we stumbled on the Mark IV product, we saw the ease of use with the front-end and back-end system and how easy it was to update it," she says.
The Mark IV solution also offered the bank the ability to embed the Fair Isaac credit scorecard into the analytics part of the solution, relates Van Meter. "It answered so many issues - taking on the process, compliance issues, pre-screening and pre-credit rules," she says. "It gives us a score as well as the state credit bureau information and other things we needed."
Additionally, the solution interfaces with Rembrandt, the bank's document system. After data is entered onto the Mark IV system, a loan officer can import the information into the document system, eliminating the double entry of information.
Although Stillwater National Bank has not increased its consumer lending volume since implementing the Mark IV solution, it has improved operational efficiency to the point where, if the consumer market does pick up, the bank would be ready to handle the additional volume - without having to increase the number of staff, according to Van Meter.
"Commercial lending is our focus, so as our bank grew, this department wouldn't have to grow much," Van Meter relates. "But," she continues, "we could grow without adding people since the system is in place."