Search report reduces risk, improves credit decision turnaround

By Benjamin Balk, SAI Global General Manager, Product and Marketing, September 15, 2015

Australia's banks and financial institutions provide in excess of $650 billion in commercial credit to the market. The majority of commercial loan decisions rely on company and securities checks which provide insights into a business's ability to manage debt.

Says SAI Global General Manager, Product and Marketing, Benjamin Balk: “In financial institutions these processes typically involve commercial credit teams painstakingly trawling through hundreds of pages of government extracts, performing separate ASIC, PPSR, Bankruptcy and other searches and once done, interpreting the data and developing a summary of the results.

 

Decisions about whether or not to approve credit applications are often based on these findings which despite best efforts can be subjective, prone to error and overlook vital information tucked away in difficult to read reports, particularly in relation to commercial lending. The fallout from this is that loans can be granted without the lender seeing the full picture. For financial institutions, this can mean accruing unnecessary bad debt and result lost opportunities thanks to time wasted on prolonged data reviews. In a highly competitive market and with increasing compliance obligations, making the right decision fast has never been more important

Benjamin Balk

SAI Global General Manager, Products and Marketing

SAI Global's new Dynamic Company and Securities Report (DCSR) is radically reducing the risk of human error and improving back office efficiencies by doing much of the 'heavy-lifting' in assessing and processing commercial loan applications. 

Launched this year, the report is part of SAI Global's rapidly expanding stable of 'commercial insights' solutions. It has been integrated with the company's commercial insights platforms, Search Manager and  Encompass.

 

The new report does the hard work by analysing the key data from ASIC, ABR and PPSR searches and presenting the results in a concise upfront summary report. This allows lending teams across the financial institution to quickly confirm details about companies and their directors, their assets and other individuals or entities involved in a deal. It also highlights areas of potential credit risk when used at the point of credit application. This greatly reduces the errors that come with manually sourcing and interpreting data because information is provided as a ‘statement of fact’ from government sourced data and there is no need for subjective interpretation.

Benjamin Balk

Mr Balk says this not only allows for better decision-making and the opportunity to identity key risks or blockers to a commercial loan application early on - ahead of ordering credit information - but also has the potential to reduce processing time, helping with a faster time to a 'yes' decisions in order to get customers off the market.

Initial results from a trial underway of the report in a major Australian bank, has seen an 80 per cent reduction in human effort required to order, interpret and assess ASIC, ABR and PPSR data, resulting in fewer errors in data interpretation by staff and loan decisions being made in a much shorter timeframe.

It has also seen the number of separate information search processes drop from up to four down to one, reducing the ordering and assessing of same source information on average from 22.5 minutes to 4.5 minutes

 

Additional benefits

The Report has also provided banks with the perfect solution to a long-standing problem: how to store historical search material which is typically discarded after initial use, such as during a credit application.

Search Manager users are also able to access an automatically created 'workspace' on the Encompass* platform via a link in the DynamicReport. Here they can access all the original search documents, even a spreadsheet of PPSR results. The Encompass platform enables the customer to retain all previous data so that this can be reused and continue to give value to the financial institution throughout the lifecycle of a customer. 

 

This is a significant breakthrough and is set to have a major impact for our banking clients because they now have an available archive which will demonstrate the due diligence that has been carried out in each and every commercial lending decision, greatly aiding the audit process and displaying the bank’s adherence to compliance obligations. This information can also be used for future dealings. Now users can be confident their search history will be preserved and will stand up to future audit.

Benjamin Balk

Mr Balk says the new report has strengthened SAI Global's trusted position as a supplier of services to major banks and other lenders and has demonstrated its willingness to invest in innovative commercial insights solutions.

 

Instead of simply being a data provider, we are now capable of providing extremely valuable ‘insights’ into business’s critical information and presenting this information in a way that cuts through the complexity of traditional search and interpretation and makes it quick and easy to understand. We have brought search and analysis into the 21st century and are presenting it to our customers in a way that best suits their requirements.

Benjamin Balk

Other key benefits of new report include:

  • The opportunity to understand the full scope and nature of lending relationships, based on the PPSR, and identify any risks or information that may have not been disclosed by the borrower.
  • It enables users to identify the opportunity to upsell or take more of the customer's lending business if lending relationships are spread across multiple lenders
  • Reduction in new staff onboarding and the length of time it takes train and upskill new staff thanks to more consistent processes and interpretation of information
  • Helps to fulfil 'know your customer' requirements by providing a verification of the customer from multiple government sources of information related to the organisation.
  • Reduction in hard costs by more efficiently ordering data ordered by front office, through the end to end transaction. This avoids purchasing the same report multiple times.