Solution Sheet. Profitable Small Business Lending

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1 Solution Sheet Profitable Small Business Lending Improve Profitability by Making Your Small Business Lending Scalable & Efficient

2 Overview Small Business Lending is a complex process. The risk associated with small business loans is high and assessing creditworthiness of small businesses is often a challenging task due to information asymmetry. These loans are often associated with "piles of paperwork", high turnaround time and massive transaction costs. These reasons deter Banks from venturing into the Small Business Lending space and emphasize the importance of an efficient lending work flow tailored for small business loans. Why Banks Struggle with Small Business Lending Lengthy on-boarding time and high costs associated with Small Business Lending are comparable with high value commercial loans. Several challenges stand between Banks and efficient small business lending. Some of these challenges are: Lengthy on-boarding time as it can take days or weeks for due diligence checks, further aggravated by manual hand-offs No defined process for small business loan renewals and modifications Delayed processing of small business loans that do not fall under policy guidelines Unstructured sub processes such as third party appraisals, fees management, etc. High volume of small ticket sized loan applications that entails similar due diligence in terms of time, effort and cost as a high value loan applications Tough to manage cost vs revenue ratio Manual management of- customer data, credit & risk analysis, credit approval note creation and coordination with decision makers, manual check on central bank compliance policies. Manual management of documentation, collateral management, covenant monitoring and referral policies Difficult customization of lending process due to diversity of small businesses

3 Customer On-Boarding Optimizing Customer On-Boarding Customer On-Boarding is a critical step in the lending cycle. Despite digitization, the customer onboarding process remains a time and cost intensive affair. In order to mitigate this and to improve customer experience, banks need to pro-actively strategize a simplified and seamless on-boarding experience. Data Management Managing customer data is critical for banks. A majority of banks still struggle to consolidate customer data with fragmented information scattered across disparate applications. Banks need to simplify the collection, storage and utilization of customer information. Unified View of Customer Given the patchwork of applications that banks have, they do not have a single repository to store customer information. This leads to poor customer experience as customers have to repeat basic information every time they transact with the bank. Moreover, there is a dire need for a single view of customers as banks tend to maintain siloed customer information across products availed and applications. Automation Benefits of Customer On-Boarding Process Enhanced life-time value of customers Reduced dependence on manual processes, saving time and costs Minimized data errors and unified view of customers with centralized data storage Contextual customer engagement in real time Competitive service offering Regulatory Compliance Compliance is central to on-boarding customers. Banks need to do due diligence checks to ensure KYC, Anti-Money laundering, FATCA and other regulatory norms compliant. Compliance keeps changing and most banks are still stuck with hard coded rules which makes it difficult to make faster transition to new norms. The result of course is manual hand-offs which substantially increases client on-boarding time, specifically for corporates and small businesses. Multi-Channel On-Boarding Customers today expect a digital on-boarding experience, one that is device agnostic and seamless. They want faster transactions, self-service portals, transparency and meaningful engagement with their banks. Banks need to provide a centralized on-boarding experience to customers that offer a unified view of customer information can offer customized product offerings. Automation and digitization of end-to-end small business on-boarding and loan origination process with a Configurable & Unified Platform with seamless integration capability to core systems is the key.

4 Newgen Small Business Lending Automation Software Newgen Small Business Lending solution automates and streamlines the end-to-end on-boarding process and lending cycle for the full range of small business loan types from prospecting and origination to underwriting, disbursement and servicing. The solution provides a simple and easy to use interface for the capture and analysis of small business loans. It is built on Business Process Management framework to enable credit origination, approval and monitoring in a paperless and electronically driven workflow environment. Newgen Small Business Lending accelerator is a packaged application for automating small business lending that comes with configurability, thanks to the underlying BPM framework. It brings best of both worlds (buy vs build) that seamlessly enables a bank to meet 100% automation requirement and connects with all external systems to act as a unified lending automation platform. Newgen's Small Business lending automation software allows banks to differentiate themselves from their competitors. No matter how different, how complicated process a bank follows, the solution seamlessly automates it. Seamlessly on-board small business customers from any channel Branch Web Portal Mobility Third Party Agents Working Capital Term Loan Real Estate SBA Other Small Business Loans Solution Accelerators Ready-to-use, tried & tested, domain-specific business application components for each loan segment Configuration Layer Process - Forms - Workflow - Rules - Masters - Dashboards - Document Management Core Banking Treasury CRM Bureaus Other Systems Document Management System

5 Streamlined Small Business Lending process with Newgen solution JACK HENRY LOAN ORIGINATION SYSTEM BLACKLIST FIS Prospecting Customer Sign Off Loan Booking DEDUPE EQUIFAX SALESFORCE FISERV LASERPRO CORELOGIC INTEGRATION Applicable Data Entry Customer Acceptance & Selection Underwriting Documentation Generation of Offer Letter Decision & Approval Disbursement Review Servicing INTEGRATION WATCHLIST FRAUD DATABASE COLLATERAL DATABASE CREDIT BUREAU CREDIT DATAMART BAKER HILL DOCUMENT MANAGEMENT Imaging - Document Upload - Version Management - Sharing - Retention WORKFLOW Automated Routing - Exceptions - Escalations - Decisioning - Tracking - Reports ONE OBLIGER NAICS Solution Highlights Prospecting and Lead Generation - Efficient lead management and handling of cross and up-sell opportunities Pre-qualification - the solution facilitates pre-qualification of small business loans Credit Scoring - Easy credit scoring with bare minimal financials and data from the borrower Straight Through Processing - Straight through processing of loan applications with a Credit Decisioning engine that lies atop the solution. Credit Analysis and Underwriting - Comprehensive credit assessment tools that take into account financial information, ratio analysis, account conduct and pricing Risk Management - Complete due diligence through Peer Group Analysis, Trade Checks, real-time pipeline view, automated rules & standardized processes Document Management - Generate Loan Package with small business loan documents and security instruments in pre-defined bank specific templates Collections and Provisioning - Efficient management of delinquent accounts and linked accounts through incessant follow-ups and history logs

6 Disburse Loans at Accelerated Pace With Newgen's Small Business Lending solution, each small business loan type can be easily managed from end-to-end i,e. from prospecting, document capture, digitization, origination, approval, closing and funding to servicing. The solution ensures paperless processing of credit applications with a robust built-in document management system. Further, the solution ensures seamless adaptation of unique loan products through its embedded rules engine. Lead Management Lead Capture Lead Assignment Tracking & Follow Up Lead Conversion 360 Degree Customer View Customer Accounts Group & Sister Concerns Service Request Management Relationship Details Document Checklist Product Setup Pricing Setup Application Processing Collateral Capture Integration with External Credit Bureaus Change in Prospecting Origination Origination Financial Pricing Spreading Change in Collaterals Rescheduling Restructuring Review Renewals Servicing Credit Analysis Scoring and Rating Risk Management Credit Automation Memo Generation Decision and Approvals Account Monitoring Account Profitability Covenant Monitoring Portfolio Monitoring Business Activity Monitoring Dashboards Reports Offer Letter Generation Appeals Closing Documents Funding

7 Business Benefits Faster Customer On-Boarding - Deliver a seamless on-boarding experience to your customers to enhance their life time value. Newgen's Small Business Lending solution provides a seamless omnichannel experience, ensuring ease of use, convenience, intuitive assistance and auto-kyc verification which significantly decreases on-boarding time of small businesses End-to-End Risk Management - With methodical portfolio monitoring, automated tracking of collaterals and covenants, comprehensive reporting and standardized lending processes, leading global organizations are realizing the benefits of end-to-end risk management delivered by Newgen Small Business lending solution Greater Selling Opportunities - Gain better insights into high profile accounts to enhance profitability, create cross-sell opportunities and underwrite loans competitively. The system ensures all touch points with the customers are streamlined to power strong customer relationships Unprecedented Operational Efficiencies - Eliminate duplicate data entry, reduce error rates and policy exceptions, enable dynamic staffing, business rules driven underwriting and documentation, and streamline approval cycles for faster transactions. The resultant speed creates a distinct competitive advantage in a fiercely fought marketplace Compliance and Process Standardization - Close monitoring of process Service Levels across the lending lifecycle from initiation to disbursement ensures compliance and risk optimization. The system ensures that all loan documents and covenants are tracked and reviewed automatically in accordance with credit policy and compliance. It allows generation of custom reports for increased oversight Sales & Marketing Increase Profitability Increase Customer Satisfaction Business Value Reduce Business Risk Increase Business Agility

8 About Newgen Newgen Software is a vendor/provider of Business Process Management (BPM), Enterprise Content Management (ECM), Customer Communication Management (CCM), Document Management System (DMS), Workflow and Process Automation software. The company has a global footprint in over 60 countries with large, mission-critical solutions that have been deployed in Banks, Insurance firms, BPO s, Healthcare Organizations, Government and Telecom Companies. Newgen's Quality Systems are certified against ISO 9001:2008 and Information Security Standard, ISO 27001:2013. Newgen has been assessed at CMMi Level3. WRITE TO US FOR SALES QUERY DIAL USA & CANADA: usa@newgensoft.com USA & CANADA: +1 (202) INDIA: corpmktg@newgensoft.com INDIA: APAC: asiapac@newgensoft.com APAC: MEA: emea@newgensoft.com MEA: UK: uk@newgensoft.com UK: +44 (0) SOLUTIONS FOR BUSINESS PROCESS & CONTENT MANAGEMENT,