Appro Software Expected to Speed Approval Process
Customers of Premier Bank in Baton Rouge, La., may soon be able to get a decision on credit applications in less than a minute.
The service will be possible because of a new risk analysis system that the subsidiary of $4 billion-asset Premier Bancorp began installing earlier this month.
With software from Appro Systems Inc., also of Baton Rouge, the system compares information from a customer's application against the bank's approval criteria.
No More Four-Day Wait
The bank's risk exposures are then pulled together into a chart that lending officers and customer-service employees can call up on the screens of their branch terminals.
When the system is fully operational, Premier Bank Officials predict they will reduce the time it takes to evaluate a loan application from four days to a few minutes. In some clear-cut cases, a decision may be made in less than a minute, they said.
"Reducing application handling time is going to be a gradual process - the system is a complicated animal that we will be perfecting over the next year," said Olin Hall, vice president of Premier credit services.
"Over time, though, we're going to be able to eliminate a lot of duplicate [datal entry and other inefficiencies that get in the way of selling credit products," Mr. Hall added.
Bankers and marketing experts say giving credit approval or denial in a matter of seconds reflects well on a bank's customer service image. Customer service is an important element in Premier's strategy to remain among the top 200 consumer U.S. lending institutions.
In addition, a comprehensive risk analysis system can expand a bank's business if it is used as a tool to sell additional loans to qualifying customers.
"When a representative can view a detailed customer credit analysis in a minute or less, more time can be spent evaluating the customer's needs and offering a variety of products while the customer is still in a buying mood," said Hugh Hayman, managing director of First Pinnacle, a Dallas consulting firm the specializes in earnings-improvement programs.
Mr. Hall at Premier said improved cross-selling is the bank's goal in installing the software.
That approach will be tested first with credit cards. When customers apply for a card or overdraft-protection account, the system will automatically put the application through for other products, such as a Visa debit card. If the applicant is approved, the platform employee can attempt to make the sale.
Link to Other Products
Eventually, "if a guy passes muster on an auto loan, we Can tell him that he's preapproved for a credit card on the spot," Mr. Hall said.
The system also has a feature that identifies credit applicants who qualify for Community Reinvestment Act loans, which can help banks with CRA compliance.
The software, with host-computer interfaces, costs about $70,000. Officials at Appro said installation takes about 60 days.