Category: Banking Analytics

Commercial loan officers may be the face of the lender but other lending professionals, including underwriters and credit analysts, can also impact the borrower’s experience as well as the profitability of the overall commercial loan portfolio. What are Commercial Banking Loan Officer Key Performance Indicators (KPIs)? Since personnel-related costs tend to be the bulk of your commercial loan origination costs, it makes sense that you’ll want to keep your staffing as lean and mean as possible. But downsize headcount too much, and you’ll face a backlog of loan applications in…

“How much profit are we making on this loan?” Seems like a simple question, but when it comes to commercial loans, it’s not an easy answer. Many lenders don’t have a good handle on their true profit margin on commercial loans. And in an environment with low-interest rates that squeeze margins and non-traditional competitors forcing lenders to waive fees, these loans can be a drag on earnings. Applying loan origination key performance indicators (KPIs) to commercial loans gives you a clearer picture of your actual loan origination costs. What are…

Even as customers flock to online and mobile banking channels, brick-and-mortar retail bank branches continue to play an essential role in serving customers. Branches are still a leading sales channel for bank products and services, and most customers still value face-to-face transactions at their local retail branch—even if they don’t visit it very often. But branches are also one of a retail bank’s biggest operational expenses. A commonly cited statistic is that the same transaction done in a branch costs about $10 compared to about 25 cents in the digital…

In response to the 2008 financial crisis, banks in the U.S. and across the globe have taken steps to significantly improve their financial ratios. For example, in an effort to improve their Common Equity Tier 1 capital ratio, banks have raised additional equity. Although financial ratios are a critical measure of a bank’s liquidity and solvency, there are a variety of ratios that measure everything from customer service to staffing levels that banks can use to benchmark their efficiency, performance, and profitability. And while bank capitalization has improved, banks remain…

Even with technology advances and automated processes, bank productivity and efficiency can lag. For example, according to the Mortgage Bankers Association (MBA), mortgage loan production expenses for banks actually increased to $9,299 per loan in the first quarter of 2019, and productivity remained unchanged at 1.8 loans originated per production employee per month. While banks typically have a lot of data, they lack the ability to drill down into their banking operations and measure performance, cost effectiveness, customer service, efficiency, and more. This lack of insight can be crippling for…