Bank of Montreal is offering student lines of credit over the World Wide Web, targeting a market segment that is Internet-savvy and certain to grow the bank's customer base.

If all the information that an applicant provides is valid,

and the credit bureaus are up and running, a loan application should be processed within 30 seconds. "It saves time for students and their parents and reduces costs for the bank," says Jerry Tylman of American Management Systems' finance industry practice, who worked on the project with Bank of Montreal.

A credit decision on each application is rendered by sending customer-provided information and credit bureau information to Strata, a decision engine developed by AMS, which scores the application against the bank's predefined risk levels. The credit line can be used for education- related expenses like tuition, books or rent. Repayment of loans is delayed until after graduation. To apply for a loan, a student can either navigate the bank's home page or go directly to a student line of credit page. "The whole self-serve aspect with the customer doing the data entry saves the bank money," says Tylman. "That and the fact that a single system is processing all of the information and the bank is using free Internet access to gather information."

Bank of Montreal has been selling loan services through the Internet since launching North America's first Web-based mortgage lending system in February. In March, the bank began providing instant Internet-based MasterCard approvals. "The Internet has proven itself remunerative because we're seeing new volume from customers new to banks," says Jane Weatherbie, Bank of Montreal's vp of personal lending services. "If we are there for the students now, we hope that they will be there for us later."


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