Incremental Innovation Drives Bottom-Line
A complete overhaul may be prohibitive in terms of cost and effort required. However, banks can focus on opportunities with an efficient credit management system with a proper limit management system and back-end processing system.
Some banks have successfully introduced innovation in credit management through incremental transformation.
According to the CEB TowerGroup 2015 Adoption and Investment survey, better risk management and process improvement stand out as the most important value driver for technology investment.
Project sponsors for credit management can start by updating the system of record or the credit approval and monitoring system - areas that will have a direct impact on risk management and process improvement across different divisions.
By achieving these larger business goals, the sponsors will be able to secure broad project and budget support during system evaluation and investment decision.
At the same time, analytics can be effectively utilised. Currently, the bank essentially provides a data dump to their customers with reports around balances, payments, stock transaction. By providing insights and trends information in addition to more flexible reports, banks can help their clients with their own tracking and forecasting.
There are real opportunities for banks to revamp their credit management systems to reduce exposure to risk, decrease turnaround time for loan processing, reduce cost of servicing and extract greater efficiency from their existing business.
Good economic conditions may mask credit problems by allowing even the marginal credits to perform well enough to avoid defaults. However, the current market volatility means that banks need to be prepared with the right tools and accurate information to avoid potential reputation, financial and operational risks. It is sync or sink for credit management.