WE'VE GOT YOU COVERED WWW.CP2LAW.COM DENVER | FORT COLLINS | GREELEY Coan, Payton & Payne, LLC provides a full range of legal services to the banking industry. activities vs. chasing clients to complete applications. The streamlined process ensures faster loan processing, quicker decision-making and a more agile response to market changes. This efficiency is vital for banks to maintain competitiveness in a rapidly evolving financial landscape. • Risk Management: Advanced lending platforms revolutionize the way banks assess and manage risk, providing more accurate and comprehensive risk assessment using more available data. These platforms are able to aggregate, flag and analyze key signals holistically to identify potential risks and help lenders make more informed decisions to both expand access to credit while reducing default risk. Using rule-based decisioning also allows the bank to automatically set and apply risk-based pricing. Post-decision lenders can gather ongoing insights on borrower health that are crucial for maintaining a healthy loan portfolio and mitigating risks before it’s too late. • Enhanced Customer Experience: Customer expectations are increasingly geared toward quick, seamless and accessible services. Digital lending platforms like Biz2X simplify the loan application process, making it more user-friendly and efficient. This simplification not only enhances customer satisfaction but also fosters loyalty by providing a hassle-free banking experience. The ability to apply for loans online from any device, track application status and receive timely updates is in line with the demands of modern banking customers. • Preparation for Future Growth: The financial market is never static, and banks need to be equipped to adapt and grow with it. Advanced lending platforms position banks to be more responsive to market shifts and emerging opportunities. With tools that offer insights into market trends and customer behaviors, banks can identify and capitalize on new growth avenues. These platforms also enable banks to scale their operations efficiently, catering to a larger customer base without proportionately increasing their operational complexities. Such scalability is essential for banks aiming to expand their reach and influence in the banking sector. Overcoming Current Challenges Banks may be hesitant to lend in the current environment due to high interest rates and economic uncertainty. Banks are re-evaluating their portfolios and lending strategies to diversify portfolio risk, as nobody wants to be left holding the short end of the stick. With rising inflation and historically high rates, small businesses’ financial confidence has taken a hit, and their reliance on community banks to support them during this time is critical both to clients and banks to maintain the deposit relationship. This vicious cycle has seized up businesses’ ability to obtain financing and will accelerate the shift to alternatives. Nowhere is this more pronounced than in commercial real estate, that many banks have loaded up on in recent years. With many employees still working from home, commercial real estate sits empty at a significantly higher rate than before the pandemic, elevating the risk for backers. Using digital tools as a way to efficiently process smaller ticket loans can offer banks the right tools to focus origination and diversify portfolio concentration risk. Strategic Vision: Looking Beyond Immediate Challenges Banks need to look beyond the immediate lending environment and consider the broader benefits of digital lending platforms. These include maintaining customer relationships, exploring new market opportunities and preparing for future economic cycles. The Fed has indicated inflation has likely peaked, and the economy is cooling, with rates expected to come down later in 2024. It’s never been a better time to upgrade technology to reduce costs, reduce reliance on physical branches, and implement the right digital tools to maintain competitiveness and capture future demand. The current banking climate presents both challenges and opportunities. For banks, especially those in the middle tier between local and national in size, the path forward lies in embracing digital transformation. Learn more about Biz2X, the digital lending platform enabling financial institutions to accelerate growth with a custom omnichannel experience and best-in-class risk analytics tools. Visit www.biz2x.com. 17 Colorado Banker
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