A year ago, with lower interest rates attracting more consumer loan applicants, The People's Bank, (York, Pa., $365 million in assets), determined that it needed a more efficient tool to process credit scores and underwriting information. As loan application volumes amplified, the institution's existing system simply could not handle the the number of applications coming into the bank.
That's when The People's Bank turned to Baker Hill (Carmel, Ind.), which was already providing loan underwriting and credit scoring products for the bank's business customers. The solution, Bank2Consumer, draws information out of a PC-based credit scoring model from Fair Isaac (San Rafael, Calif.), which is then brought into Baker Hill's Web-based loan underwriting and credit scoring solution, according to Scott Weaver, senior vice president of The People's Bank.
Seeking a Comfort Level
"We were looking for a way to give us comfort in our underwriting decisions, as well as speeding up the process," says Weaver. "Fair Isaac's statistical model just fit our bill perfectly. We were able to get quick and consistent answers to our underwriting for our smaller business loans, and we felt that has improved our efficiency in underwriting those loans, as well as giving us consistent credit decisions for those smaller business loans."
Apart from the software's capabilities, The People's Bank's familiarity with Baker Hill was a definite selling point, Weaver acknowledges. "We looked at different competitors to Baker Hill for credit scoring, but Baker Hill has already has the Bank2Business model and we were happy with that," he says. "We liked their service, their pricing, and we were happy with the Web-based product that they offered us. They had the inside track to start with."
The bank started using Baker Hill's Bank2Business solution in September 2002 and went live with the Bank2Consumer product-a browser-based consumer loan origination solution used to process and act on direct loans, revolving lines and home equity loans-a year later.
The result has been a reduction in the amount of labor and time required to make loan decisions, Weaver says. "Efficiency and consistent decision-making are really the two primary reasons," he says. "We no longer have to collect the paper, take a paper application or collect any underwriting data that we want to use to back up the information being pulled on the manual side."
Learning from Experience
Although the implementation and overall solution has been successful, Weaver says the Bank2Consumer solution could have been executed in an easier fashion. "I probably would have piloted the program at a single branch, rather than just unleashing it to all of the system at one time," he says. "It would have helped us work out a few internal bumps and bugs that you hit when you start a new process like that, before we opened it up to the rest of the bank."
Having hurdled that obstacle, The People's Bank is now working on speeding up the online application process, according to Weaver.
INSTITUTION: The People's Bank (York, Pa.)
ASSETS: $365 million
BUSINESS CHALLENGE: Speed processing of credit scoring and underwriting.
SOLUTION: Baker Hill's (Carmel, Ind.) Bank2Consumer consumer loan origination solution.