A regional bank’s need to prevent and reduce credit losses from defaulted commercial loans was symptomatic of a greater challenge. The bank needed a data management program that could help it more effectively manage different aspects of the business.
Read on to learn how a new data-driven strategy helped our client triumph over the core challenges of 1) meeting stringent regulatory demands for more robust reporting and 2) dealing with issues surrounding its data and data access.
A common challenge in banking
Each year, banks approve billions of dollars in commercial loans. Throughout the approval process, documents are signed and covenants are created to ensure that funds will be repaid. Funds not repaid within the outlined term can result in higher capital requirements on the institution and, ultimately, credit losses for the bank.
Most often, the only indicator that a loan has gone bad is when payments become delinquent – which is too late. Our client wanted to analyze such scenarios well in advance to prevent payment default. And that’s what led to the need for an improved data management program.