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Customer Pain Points with Commercial Lending

By Karl Keller

I think we would all agree that delivering a commercial loan to a new prospect should be a simple and straight forward process.  We need to evaluate the prospect’s ability to re-pay the loan, make a credit decision, and get the check or wire out the door in an efficient way.  But in reality, the process is a balancing act between meeting underwriting criteria while still exceeding customer expectations. 

Let’s start by taking a look at the situation from the customer perspective.  The customer viewpoint of the process is the only viewpoint that really matters.  Commercial customers have many options when it comes to funding their business.  The fact that they are considering a loan from your institution indicates that you have already done a successful job in building a trusting relationship.  However from the customer viewpoint, they have four pain points that need to be addressed in a consistent and timely fashion:

1. Can I get approved for the dollar amount needed?
2. What is the information your financial institution requires from me or my business to make a decision?
3. When will I have my wire or check?
4. What costs are involved along the way?

From the customer perspective, it sounds like pretty straight forward requirements.  The pain points for can be that the bank or credit union does not always provide what they need in a timely fashion.

The bottom line is that a commercial customer requires a specific level of service.  A service level agreement (SLA) between the financial institution and the customer needs to be established to allow for reasonable expectations to be fulfilled.  The customer needs to understand what information is required to make a decision and the financial institution needs to deliver on the SLAs or risk losing the deal.  The ability of the financial institution to meet or exceed SLAs is key to growing the relationship both now and in the future. 

Let’s take a closer look at just one of the customer pain points--when will I have my wire or check?  With consistency, how well does your institution answer this simple question?  Can you deliver on the answer that is provided?  Will the answer be acceptable or will the lender’s answer cause the prospective client to begin shopping for other solutions that deliver more quickly. 


Lenders need to answer this question with a high level of confidence.  However, to answer this question, the financial institution needs to have a consistent and repeatable commercial loan workflow process that will allow for SLAs to be exceeded 98% of the time. 

This workflow process starts with the early reporting of the pipeline opportunity.  Sure, banking CRM systems are nice to have to track prospect notes and meetings, however the true value is discovered when you can use your banking CRM to not only report and update pipeline information but also be able to track the loan workflow process from start to finish.  Often it is only the lender that is using the system.  What if loan operations, loan fulfillment, legal, portfolio management, underwriting and compliance were all accessing and updating the same system to ensure that every workflow step is completed efficiently? 

New competition is driving the need for efficiency.  Eliminating customer pain points and focusing on exceeding customer expectations will result in more successful loan closures and pave the way for future sales.