Insights Teslar - Flipbook - Page 3
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Commercial & Industrial Lending
Slumped in the First Half of 2023
Source: Federal Reserve Bank of St. Louis
In Billions
59.7%
$2,850
Percentage of bankers
who say C&I loan demand
from mid-sized and large
firms has weakened moderately or substantially.
$2,815
$2,807
$2,796
$2,800
$2,774
$2,767
$2,758
$2,750
54.3%
In-person meetings with clients are still
an important part of Skyline’s business
model, so executives chose not to automate the entire process. “We still have a
traditional banking model when it comes
to the customer experience of applying for
and closing the loan,” he says. Instead, the
bank focused on streamlining backroom
operations, such as building loan packages, tracking documentation and creating
Percentage of bankers who
report weaker C&I loan
demand from small firms.
$2,700
Jan.
Feb.
Mar.
Apr.
May
June
Source: The Federal Reserve
Senior Loan Officer Survey
digital workflows, Edwards says.
Automating those parts of the process
has freed up bankers’ time and mental energy. Staff no longer need to spend copious amounts of time scanning documents,
working in shared files or Excel.
“[Teslar] creates a large degree of efficiency with its handling of those small
Bank of St. Louis reported that C&I lending across U.S. banks totaled $2.8 trillion —
dent of product at Teslar Software.
“Loan production might not be off the
tasks,” Edwards says. “We have incredibly
smart people, and we take some of those
still higher than pre-pandemic volume but
charts right now,” she says, but bankers
rudimentary tasks out of the picture so
representing a slight but steady decline
can still use those updated systems to
they can focus on what they’re good at.”
from early 2023. That figure exceeded $3
manage portfolios and loan renewals until
trillion in May 2020, when Bank of Idaho
loan demand accelerates.
and others were fielding intense demand
due to PPP.
“I would say this is the best time to do
Bank of Idaho had a similar experience.
Wright estimates that automating the
lending process through Teslar saved the
it. The time we did it [during PPP] was
bank the equivalent of two additional full-
the worst,” Wright says. “When times
time employees. The bank hasn’t let go of
Senior Loan Officer Survey in July 2023
are slow, it’s the best time to implement
any lending staff because the bank’s loan
found weakened demand for C&I loans
change. Testing is easier. Running systems
volume, along with its asset size, has more
from small, medium and large firms.
in tandem, which takes twice as much
than doubled since the first quarter 2020.
Many banks also indicated that under-
work, is easier. This is the perfect time to
But it hasn’t needed to add any more back
writing standards had tightened some-
really hit a home run.”
office staff to keep pace with increased
Additionally, the Federal Reserve’s
what as the economic outlook grew more
loan production, he says.
uncertain and competition for loans had
eased.
Reduced activity could provide an
Bankers looking at automating their
Balancing People and Process
Bank of Idaho is not alone in the way it
lending process frequently worry about
potential layoffs, Berger says. But that’s
opportunity for community banks to auto-
went about updating its business lending
seldom what actually happens. It’s more
mate part or all of their business lending
process. Anthony Edwards, senior credit
constructive for bankers to think in terms
systems, if they haven’t already. Banks
risk officer at Skyline National Bank,
of how their staff might be able to repur-
that choose to streamline underwriting
shares a similar experience. The subsid-
pose their time once the more mundane
or loan modification systems now are un-
iary of $1 billion Skyline Bankshares in
tasks of lending are streamlined.
likely to be pressured by intense demands
Independence, Virginia, also automated
on time and resources while adapting to a
certain aspects of its lending process after
banker, trust me: It’s a better experience
new system, says Amy Berger, vice presi-
the first round of PPP financing.
for your client,” she says.
“If it’s a better experience for your
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