Solution Sheet. Profitable SME Lending

Transcription

1 Solution Sheet Profitable SME Lending

2 Overview The Small and Medium Enterprise sector is critical for strengthening the economy and generating employment opportunities. Loans to the SME sector are important for banks not only from a compliance perspective but also from a profitability perspective as they constitute portfolio of Low Risk Loans. To close the existing credit gap, the SME lending sector is increasingly witnessing innovation across supply chain, origination, loan servicing and portfolio management. Some banks are already reinventing business models by offering value-based and need-based segmentation models. In such a scenario, banks need to transform SME Lending due to increasing competition, changing regulations and evolving customer expectations and technology. Reasons for Lukewarm Uptake of SME Lending by Banks Traditionally, SME loans have been associated with piles of paperwork and a high turn-around-time, and transaction costs to process SME loans are comparable to high value Commercial loans. The risk associated is high and assessing creditworthiness of small businesses can be difficult due to information asymmetry. Primary challenges Lengthy on-boarding time as it can take days or weeks for due diligence checks, further aggravated by manual hand-offs 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 High reliance on manual underwriting coupled with lack of reliable data Highly paper intensive process Manual management of- customer data, credit & risk analysis, credit approval note creation and coordination with decision makers, manual check on central bank compliance policies. Post credit approval, manual management of documentation, collateral management, covenant monitoring and referral policies Diversity in SMEs makes it difficult to customize the SME loan process

3 Customer On-Boarding Need for balancing compliance and customer experience Currently banks have a fragmented on-boarding process which is highly manual, and inconsistent across different lines of businesses. In spite of digitization, on-boarding process for customers remains a costly affair with inflated on-boarding time. For improving customer experience, banks need to proactively strategize a smooth on-boarding experience which can increase customer stickiness. Optimizing Customer On-Boarding Data management Managing customer data is one of the primary aspects that banks need to look into. A majority of banks today are still struggling to consolidate customer data with fragmented information lying across disparate applications. Banks need to adopt a new approach in how they collect, store or utilize 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. Get compliance right 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. Seamless multi-channel on-boarding Automation benefits of Customer on-boarding process 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. Good first impression contributes to enhanced lifetime value of customers Digitization negates dependency 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 Automation and digitization of end-to-end SME on-boarding and loan origination process with a Configurable & Unified Platform with seamless integration capability to core systems is the key.

4 Newgen SME Lending Automation Software Newgen SME Lending solution automates and streamlines the end-to-end on-boarding process and lending cycle for the full range of SME loan types from prospecting and origination to underwriting, disbursement and servicing. The solution is built on a Business Process Management framework to enable credit origination, approval and monitoring in a paperless and electronically driven workflow environment. Newgen SME Lending accelerator is a packaged application for automating SME 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 SME lending automation software allows banks to differentiate themselves from their competitors. No matter how different, how complicated process a bank follows, Newgen's SME Lending platform seamlessly automates it. Seamlessly on-board SME customers from any channel Web Mobile Apps Bulk Scanning FAX E- Documents Handling all types of loan processes Small Business Loans Agriculture Loans Working Capital- Revolving Loans Compliance Management Peer to Peer Lending Invoice Discounting Exchange Invoice Discounting Collections Built on Newgen BPM & Case Management Platform Integration with legacy and external systems Core Banking Credit Rating & Credit Bureau Blacklist & Watchlist Fraud Database Collateral Database CRM

5 Streamlined SME Lending process with Newgen solution CONFIGURABLE LOAN WORKFLOW BLACKLIST INTEGRATION Pre- Screening Decision & Approval Generation of Offer Letter Document Capture Automatic Creation of Credit Memo Documentation Credit Application Risk Evaluation & Review Disbursement Site Visit & Report Credit Analysis Renewal, Review & Monitoring INTEGRATION DEDUPE WATCHLIST FRAUD DATABASE COLLATERAL DATABASE CREDIT BUREAU Decision / Approval Dashboard & Reports Alerts & Notifications ONE OBLIGER Workflow/ Rules & Forms Integration Adaptors Document Management NAICS Solution Highlights Prospecting and Lead Generation - Efficient lead management and handling of cross and up-sell opportunities Simplified On-Boarding - Seamless on-boarding with several configurable templates for customer and product specific data capture 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 SME loan documents and security instruments in pre-defined bank specific templates Collateral Management - Unified workflow around releasing, updating, valuing and moving collaterals and other linked processes Collections and Provisioning - Efficient management of delinquent accounts and linked accounts through incessant follow-ups and history logs Servicing and Restructuring - Facilitates asset management, branch/trade referrals, partial settlements, credit extensions and foreclosures

6 Disburse Loans at Accelerated Pace Each SME Loan type is managed with end-to-end lending cycle from prospecting, document capture, digitization, origination, approval, closing & funding to servicing to ensure paperless processing of credit application in a workflow environment supported by a robust built-in document management system. The solution also adapts to unique loan products requirements of the banks with embedded rules engine. Lead Management Lead Capture Lead Assignment Tracking & Follow Up Lead Conversion 360 Degree Customer View All 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 Future Drawdowns

7 Business Benefits Faster Customer On-Boarding - Deliver a seamless on-boarding experience to your customers to enhance their life time value. Newgen's SME Lending solution provides a seamless omni-channel experience across channels, ensuring ease of use, convenience, intuitive assistance and auto-kyc verification which significantly decreases on-boarding time of SMEs 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 SME 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 leading global provider of Business Process Management (BPM), Enterprise Content Management (ECM), Customer Communication Management (CCM) and Case Management solutions with a global footprint of installations in 61+ countries with large, mission critical solutions deployed at the world's leading Banks, Insurance firms, BPO's, Healthcare Organizations, Government, Telecom Companies & Shared Service Centers. 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,