We are working in unprecedented conditions
This is truly a unique and urgent situation. COVID-19 has nearly brought the economy to its knees affecting nearly 30 million small business in the process. While most banks have moved heavily down the “digital banking” path the commercial banking divisions have lagged behind and SMB’s are now insisting on a frictionless digital experience they have come to expect through their personal interactions with banks and lenders.
Lenders have been inundated under a deluge of new credit applications, requests for forbearance and for increased limits on existing facilities. Some US Lenders reported more than a 2000% spike in application volumes during the second quarter. They have had to reallocate and, in some cases, fully reassign staff from all over the bank to cope with the inbound volume of requests. UK banks have reported similar activity during the same period.
As the recovery phase continues through the summer and into the fall and we move further away from PPP funding and Economic Injury Disaster loans, the economy will continue to reopen and tens of thousands of small and medium business will begin to apply for loans and funding. Lenders both traditional and alternative will need to leverage data historically not available to determine what businesses are riskier than others, in order to determine who to lend to and who not to.
Deeper more insightful Information will be the critical ingredient in decisioning any credit request post COVID. The information needed cannot be stale, crude or backward looking. It must be timely, straight from the applicants own accounting system with emphasis on cashflow and specifically movements in receivables and payables. It must be continually monitored in order to better understand the potential for contagion as well as overall portfolio risk.
Additionally, by gaining a consolidated view of this data across a portfolio, lenders can now create new benchmarks and create a true view as to what the best borrowers in their portfolios look like. The impact of this data can be seen across the entire institution as loan loss reserves, regulatory reporting and RWC decisions will all be driven off this accounting data.
Live, accessible and interpretable accounting data
We automate the access and review of business financials. We turn data from business accounting systems in to clear, crisp and consistent reports for lenders and we offer this 100% digitally without the need for lengthy API integration development (through our white-labelled client portal).
In particular, we are helping them:
- provide immediate relief to the volume of requests for: New credit, Forbearance, Re-Structuring and Limit increases;
- improve operational efficiencies by reducing time to collect SMB accounting data
- access real-time accounting records, fully permissioned, directly obtained from the borrowers own accounting software system for origination purposes;
- mitigate risk by provide access to borrower accounting records, for monitoring and regulatory reporting purposes;
- populate lenders preferred spreadsheet tool with current accounting information. Auto-calculating financial ratio detail for them;
- detect application fraud, by flagging non-standard patterns in the preparation of financials
- drive growth by accelerating new client onboarding and reduce friction during renewals by transforming SMB’s experience through a simplified process
Small businesses will form the backbone of the US economy’s recovery from the COVID-19 crisis. During these uncertain times, ensuring credit facilities reach the businesses that need them is one of the key activities that can limit the economic impact and support future recovery. Lenders scaling operations in order to deal with the vast increases in demand must digitize their operations far more quickly than they have ever done in the past. Not only because their customers demand it, but because the data that comes with it has the ability to transform their process, practices and decisioning and create a foundation for lending now and in the future.