WLN Articles

A Recipe for Revolution

In today’s uncertain marketplace, asset finance entities have much more at stake in striking a careful balance between the risk and reward of extending commercial financing to their clients. Certainly, access to capital is a key driver in economic recovery. But, amid tight margins and stiff competition, financing companies must take great care to fully analyze each applicant’s total financial position across all business units—and geographies—to make sound decisions. This can be tough, however, when competing lenders are clamoring for the same business and fickle customers are easily swayed to go where they can not only get the best deal, but also the fastest reply.

In short, asset finance companies today need more agile tools which allow them to gain a complete picture of each customer’s risk profile during the origination process. In doing so, they will not only minimize risk, but they will also gain a more streamlined workflow process, increased operational flexibility and greater responsiveness to meet quickly changing market demands.

The problem is, despite its critical importance, the current origination process at most financial institutions is a heavily manual, labor-intensive and inefficient operation. Far too often, decisions are made based on spreadsheets or paper-based systems that are seldom up-to-date with accurate customer data. Home-grown systems provide some automation, but many require major, and often costly, coding changes to maintain. In addition, when these front-office processes remain disconnected from back-office operations, they still require manual re-entry of customer data across disparate credit processing, database repositories, CRM systems and account management systems. The problem is exacerbated through mergers, acquisitions, portfolio expansions or new market extensions.

This cumbersome process is costly and resource intensive, often taking several days or more to get applications approved and booked into the back-office. Some may even get lost in a “black hole” with no way to ascertain the status in order to keep customers informed of the process. Unfortunately, the slow turnaround time may send customers looking for a better—or faster—deal down the street. With fewer deals being booked, profits suffer, playing into a vicious cycle of scrambling for new business with antiquated systems, only to be left in the dust.

Add in the lack of visibility across the full customer portfolio as a result of disparate systems and poor data quality due to error-prone manual entry, slow updating and data synchronization issues, and the wheels can quickly fall off the bus. The prospect of approving risky deals should send a shudder down the spine of any finance professional working in this environment.

Unfortunately, this is a common reality for many organizations and the situation begs for the kind of integrated productivity platform that has revolutionized other operational areas, like purchasing or supply chain management. As in most other business processes, technology must play a major role in automating the origination workflow. A standardized platform, created from the marriage of a more sophisticated front-office system integrated with multiple disparate back-office systems, can deliver real-time total visibility of customer data across all business units and geographies and will fuel the entire origination lifecycle from quoting through credit decisioning, all the way through booking.

By leveraging robust integration across multiple back-office systems, the modern origination platform can not only improve workflow and reduce risk for more confident decision-making, but it can also reduce operational costs at nearly every turn. By eliminating manual data entry, paper shuffling and other inefficiencies, finance professionals are free to focus on more strategic, revenue-building initiatives, like growing the number of booked deals.

With customer data kept always up to date, decision makers have access to current customer information about outstanding contracts, payments delinquencies and more to better understand the customer’s complete financial picture and decrease risk exposure.

Moreover, an automated system would enable the finance organization to deliver a faster response time, shortening the application process from days to mere minutes in some cases. This agility and responsiveness can help customers gain faster access to the capital they need—and help the financing group win more business instead of being passed over for a competing/quicker offer.

Today’s fast-paced market demands business process solutions that can keep pace with customer demands. With the right technology, asset financing organizations can carve out a stronger position in a tough economy with greater confidence and reduced risk based upon accurate, real-time customer data. This total customer visibility, blended smoothly with an integrated solution that streamlines the origination workflow process, is a technological recipe for success in revolutionizing the asset financing process as we know it.