Adding a community touch to automation has proved a profitable lending strategy for one bank.

Marquette Bank in Chicago has been able to digitize its lending processes and improve its credit memo creation time by upward of 25% using technology from the cloud-based loan origination software firm Baker Hill.

But while it now has an all-digital option to compete with fintech lenders, it makes time to meet with small-business customers, too. “You still want to have the human aspect behind it,” said Fran Brashares, commercial loan operations manager at the $1.6 billion-asset bank.

Small-business lending has long been a staple of community banking, but in recent years customers have turned to online lenders and other fintechs for credit, in large part due to the speed and digital aspect of the experience. Community banks that can offer a quick, digital service are well-positioned to win and retain small-business clients, said Joel Pruis, senior director at Cornerstone Advisors.

"Small-business owners typically want to do business with local financial institutions,” Pruis said. “At the same time, they don’t want to subject themselves to a longer and clunkier process.”

Small business lending approval percentages among banks and alternative lenders.

In the past year, Marquette invested in additional technology from Baker Hill to create a common loan origination and portfolio management platform that the bank said will further optimize lending operations. "This will allow us to automate everything from the application to underwriting, documentation and servicing,” said Tim Finlon, chief credit officer at Marquette Bank.

Finlon said the latest investment will also allow the bank to increase its small-business customer base. “Up until now, it has been very paper-based and manual,” he said. “You can only serve so many clients that way.”

According to Finlon, the new tech capabilities will allow Marquette to take the turnaround time "from weeks to days,” a transformation accomplished by creating back-office efficiency. By automating once largely paper-based processes, the bank expects to improve its process for annual reviews and loan renewals, reducing both decision-making times and operational costs.

Investments such as those Marquette Bank has made are becoming more commonplace among community banks as they seek to reassert their prevalence in small-business lending, Pruis noted. “We’ve seen a surge in this kind of activity over the last 12-18 months, and it shows no signs of slowing,” he said.

When it comes to offering quick decisions and digital experiences, community banks don’t have to replicate online lenders; simply offer an experience that is similar enough to be competitive, Pruis added. For small businesses, being able to to meet their lender is a tangible benefit.

Small-business owners are generally “on the go and like to do things digitally, but they also like to have that face-to-face option as well,” he said. “Even if [community banks] can’t have everything validated instantly, if they can at least say, ‘Based on what you’ve shown me so far, we’re good to go.’ That is something.”

Indeed, though there are plans to roll out a completely digital loan option in the future, many of Marquette’s referrals still come from the branch network.

Digital platforms work “because customers don’t have time to come in and meet with a lender for $25,000 notes,” Brashares said. “But there’s times when [small-business clients] want to sit and meet with a lender. You’ve got to have both to make it work.”