The tone and nature of our conversations here at Numerated with community and regional bank executives changed quickly and dramatically over the last two weeks as the coronavirus pandemic began to unfold in the United States.
With customers, regularly scheduled meeting agendas shifted to the tools and features available on our platform to help them navigate and execute their coronavirus strategies. With prospective customers, conversations shifted to either requests to reschedule meetings or requests to accelerate projects.
While the true impact of the coronavirus to the banking sector is still unknown, it is clear that face-to-face interactions will be discouraged for weeks, if not months, and many businesses will need financial products to weather this storm.
We’re beginning to see regional banks, community banks, and credit unions take actions to best position their financial institutions and business customers for success throughout the fallout and recovery. To that end, here are five digital lending strategies emerging in business banking to address the coronavirus crisis:
Many banks are beginning to tighten their credit policies for high-risk businesses while ensuring that quality credits and existing customers are not turned away during a temporary time in need. Banks with digital lending technology that offers transparent and flexible credit decisioning automation can quickly adjust and scale new policies with consistency across markets and banker teams.
While every bank has a different risk profile, we see banks auditing approval requirements for specific industries and other high-risk segments like sole proprietors, young businesses, and prospective customers with no bank history. For some of these segments banks are considering reducing loan sizes, tightening exposure limits, applying risk-based pricing, or increasing the floor for FICO or business credit scores.
Most banks have experience lending to businesses through good and bad credit cycles, and Numerated is committed to providing them control by expediting credit policy change requests for customers at a discounted rate during the crisis.
In addition to credit policy audits, we are seeing some banks add temporary risk mitigation steps into their digital lending processes to manage interim uncertainty.
For example, banks can add a manual review step before loans are closed with minimal impact to the customer experience. This way an underwriter or administrator can review all loans prior to closing. Another option banks have available to them is to temporarily limit self-service channels to ensure bankers are involved. Many other risk mitigation options are available on Numerated’s platform, and we welcome the opportunity to partner with banks and credit unions as they devise and execute strategies.
Wherever your bank or credit union stands in navigating your strategy, we plan to continue to share the emerging best practices we see from the market and to work overtime to stand up more digital application, digital account opening, and digital lending presences.
Reach out to us to explore how Numerated can play a role in your Coronavirus strategy.