How Platinum Bank Achieved Digital Transformation in Just Six Months

Limited branch traffic, economic uncertainty and the rise of fully digital financial institutions (FIs) are pushing traditional FIs to quickly embrace new digital capabilities to remain competitive. In this session, Platinum Bank Chief Credit Officer Jeff Bajek and nCino Regional Vice President Billy Yarborough will share how Platinum Bank implemented the nCino Bank Operating System® in under six months to digitize lending operations. Discover how the Bank leveraged new processes to remain competitive and achieve real ROI including core loan growth, faster credit decisions, higher win rates and better credit monitoring.

Transcription:

00:00:09:16 - 00:00:25:08
Billy Yarborough

Hi, everyone. Thank you for joining our case study session. My name is Billy Yarborough. I'm a regional vice president with nCino. Today I'm joined by Jeff Bajek, who's the chief credit officer at Platinum Bank. We're going to spend some time today talking about our partnership between nCino and Platinum Bank and what we've built over the last year or so.

00:00:25:14 - 00:00:30:10
Billy Yarborough

And the great work that Jeff and his team are doing with nCino on the bank operating system. Jeff, welcome.

00:00:31:12 - 00:00:35:15
Jeff Bajek

Thanks for having me. Excited to kind of talk through some of these topics for sure.

00:00:35:15 - 00:00:43:29
Billy Yarborough

Or just to start us off. If you could tell us a little bit about Platinum Bank and the types of clients that you serve. And then just also a little bit about yourself and your role within the institution.

00:00:45:00 - 00:01:25:15
Jeff Bajek

Yeah, So Platinum Bank we’re about $450 million in assets today primarily focuses on business lending. We loan to businesses up to about $50 million in revenue, but we're certainly lending to clients smaller than that Well below $1,000,000 in revenue as well. That's been our focus will continue to be our focus going forward. We're also a very active SBA lender and we're generally in the top five SBA originators in our state of Minnesota, and that will be a continued focus of our organization going forward.

00:01:26:07 - 00:01:48:25
Jeff Bajek

Myself, in the role I oversee all of the credit functions and ongoing credit risk management at the bank. I also oversee the SBA department and all other quality controls around that department as well, and also oversaw obviously the implementation of the nCino system and getting that up and running. When we launch that.

00:01:50:15 - 00:02:07:09
Billy Yarborough

Great. Jeff, many of our bank partners have some sort of strategic vision or some operational goals in mind when they're in the beginning stages of evaluating technology partners. So what were some of the factors that drove your search for digital capabilities and how do you see nCino meeting those needs?

00:02:08:10 - 00:02:39:06
Jeff Bajek

Yeah, so we you know, when we started this process to kind of think about what systems going to work best for our organization and what we're trying to accomplish. It really came down to two key factors. Number one for me is how do we manage credit risk in a growth orientated bank? So when a bank is growing in a pretty quick manner, that the credit becomes a bigger focus because you can lose control of that and lose sight of your credit metrics really quickly and your portfolio monitoring.

00:02:39:19 - 00:03:06:23
Jeff Bajek

So that was a very key component for us to take a look at is how can we get a system put into place that will deliver us the data to manage the portfolio and keep the credit risk in check through this growth phase that we wanted to go into. And we have been going until the second area really is around returning a return on investment and profitability.

00:03:06:23 - 00:03:31:23
Jeff Bajek

So obviously we want to look at a platform that can make us more efficient and a little bit faster so that we can have a return on investment and increase profitability of the organization. So those are the two main focuses that we were looking into when we started the system and started looking at different providers of a [inaudible] management system.

00:03:33:27 - 00:03:58:06
Billy Yarborough

Jeff, we're coming up on the end of 2021 here already, but the challenges from 2020 are kind of still fresh on everybody's minds here. So even amid COVID. Platinum Bank was still able to implement nCino in the bank operating system in under six months which is a tremendous number to look at. Can you talk a little bit about what that meant for the bank to have this cloud based platform while your employees were working from home?

00:03:59:10 - 00:04:29:18
Jeff Bajek

Yeah. It turned out to be interesting timing matters for sure. When we started the process, it was late 2019. We were trying to make a decision on implementing the system We ultimately made that decision. Signed a contract in early January of 2020 with expectations to start the implementation process. In March of 2020 right smack dab in the middle of everybody getting shut down and being sent home.

00:04:30:01 - 00:05:08:23
Jeff Bajek

So we were left with a couple of decisions. One is do we move forward with the platform and try to keep that movement along, or do we put it on pause and try to deal with what was at hand with COVID. We made the strategic decision that now more than ever it was important to get a system into place like this because we knew we were moving more of a remote environment and having that cloud based system where all of our employees can access data on the same platform and have a centralized location for everything that we're doing on the credit and loan side was really important.

00:05:09:06 - 00:05:30:21
Jeff Bajek

And we quickly realized how beneficial that really was as we got the system configured out, as we got the system up and running, we started using it so that that platform on a cloud base was really important for us. And the continued success that we've had at the bank here.

00:05:30:21 - 00:05:43:00
Billy Yarborough

Outstanding. So some of this digital transformation of this magnitude can have impacts across the entire enterprise. So if you could talk a little bit about how your processes have changed with the addition of the incentive system.

00:05:44:03 - 00:06:36:29
Jeff Bajek

Yeah. So the processes for us was pretty transformative because we went from a really manual paper based, spreadsheet based system where we had fractured data all over the place that we're trying to coordinate and bring in to manage the bank and the loan side of the bank, the portfolio. So our processes as really was, we're integrating all of those older types of ways of doing things into this platform, eliminating the Excel spreadsheets for calculating covenant compliance on, on loans, a [inaudible] system that really didn't exist very well, that was automated into the nCino platform and allowed us to track our financial reporting requirements.

00:06:36:29 - 00:07:22:16
Jeff Bajek

So our processes really went from an email based and spreadsheet based environment into a very strong and structured single system platform that everybody had visibility to where requirements existed and how we were going to collect information and data. So we really transformed that kind of process along the way with this system. The other area that we really changed on a process says is who's involved at what stage of every loan that we have in the organization, from prospecting to loan closing prior to really getting the nCino system implemented.

00:07:23:02 - 00:07:57:17
Jeff Bajek

You know, there was a lot of cooks in the kitchen. There's a lot of hands on a deal but nobody was really knowing who was working on what part of the deal and at what time in the process of the deal. So the nCino system allowed us to change that process, to really let everybody know in the loan department what their roles and responsibilities are and when they're responsible for completing some sort of process or task along the way and let everybody else know on that transaction.

00:07:58:00 - 00:08:26:05
Jeff Bajek

Who's working on what. So it allowed us to really rethink that entire process of how do we prospect a loan, get it into the bank, move it along the system and get it all obviously to a closing stage at the bank and redefining everybody's role in that process with as much clarity as we can. So that really changed the way we originate loans quite a bit.

00:08:28:05 - 00:08:55:12
Billy Yarborough

Yeah. Jeff, it's great to hear sort of the entire story of the previous state and platinum bank during implementation and then some of the changes that you've seen took place after having implemented nCino. So we talked about that. I'd love to hear and highlight about some of these improved business metrics that Platinum has realized from implementing incentives. So I understand that, you know, your team has seen some significant loan growth during implementation and maintain that post, go live.

00:08:55:13 - 00:09:02:27
Billy Yarborough

So how do you attribute that and what are some of the the metrics that you've seen that that have been as a result of implementing nCino?

00:09:03:26 - 00:09:38:26
Jeff Bajek

Yeah. So once we started implementing and seeing obviously COVID hit and internally we made a strategic decision as an organization in March of 2020 that we wanted to continue to lend as much as possible during this pandemic. And not get, you know, stalled by the unknowns of what the pandemic could result that we felt strongly during every economic disruption in our history.

00:09:39:08 - 00:10:03:14
Jeff Bajek

There's been plenty of strong business owners who have been successful and made money and figured out how to survive and thrive in environments of disruption. So we wanted to go seek out those types of business owners and partner with them and become their bank. So that was really the first key decision we made during the pandemic, which coincided with the nCino system.

00:10:03:27 - 00:10:51:17
Jeff Bajek

And so during the implementation of nCino, when you carve out our PPP loans, we still maintained about a 7% loan growth in 2020 and carried that momentum into 2021 and year to date, 2021. We're going to probably end up somewhere in the upper teens of loan growth for core loan growth for this year, depending on some of the ultimate payoffs, etc. But we were able to guess that loan growth continued and that loan growth would have, would not have been able to happen without having the changes in the way we operated and originated loans with the end without the senior system being in place.

00:10:52:02 - 00:11:16:19
Jeff Bajek

The reality is that type of loan growth takes a lot of coordination and a lot of systems put into place at an organization our size to accomplish that. nCino really allowed us to put those procedures and put those processes in place in order to push deals through and get loans originated and booked as quickly as possible.

00:11:17:09 - 00:11:41:28
Jeff Bajek

Because the other metric that we always look at is how quickly can you get a loan from the prospecting stage into a book stage? And with nCino, we can track that down to the hours. So I know if a loan stayed in underwriting, how many days does it take to go through underwriting? How many days that goal take to get to doc prep?

00:11:42:12 - 00:12:09:17
Jeff Bajek

And how many days did it sit in the closing stage waiting to get close to [inaudible]? And if we can shrink that, we have a huge amount of success and ability to increase our return on investment in a profitable bank. And one metric I've used in the past with our team is for every $10 million of loans you originate and call it a 4% interest rate every day.

00:12:09:25 - 00:12:37:01
Jeff Bajek

Sooner you get that on the books to earn interest. It's about 1,100 dollars per day and interest income when you do the math and that is on a daily basis. So that starts multiplying a lot. So my mantra has been the sooner we get the loan originated, the faster we can earn interest income. But it also is an ability for us to deliver the loan and the opportunity to our clients faster as well.

00:12:37:12 - 00:12:59:22
Jeff Bajek

Because not only do we win by earning interest income, but it also benefits the client because they are either buying a piece of equipment so they can start doing more production of whatever they're doing. Maybe they're buying a business and the sooner they can get that business acquired, the sooner they can start making money. There's a lot of reasons why originate a loan faster is important.

00:12:59:22 - 00:13:07:22
Jeff Bajek

It's not always for the bank, it's also for the client. We always have to keep the client in mind when we're looking at originating loans and our speed.

00:13:10:07 - 00:13:30:01
Billy Yarborough

It's a great perspective, Jeff, and by now the industry is kind of, you know, in line with that as well, or at least they should be. And they should be aware of the streamlining processes and adopting digital capabilities are critical to to remain competitive. So I'd love to hear in your opinion how these capabilities brought some ROI or [inaudible].

00:13:31:11 - 00:13:56:06
Jeff Bajek

Yeah, I think at the end of the day, we can talk a lot about internal improvements to our processes, internal improvement to how quickly we can originate a loan and start generating income. But there's really two pieces that I think the industry needs to look at and what we've looked at internally. And the first is really comes down to the clients are our loan customers.

00:13:56:19 - 00:14:28:27
Jeff Bajek

So our business customers are expecting quick, rapid turn times on launches to the best of our ability because they are anxious to get moving along with whatever thereafter. So the the return in the digital state are digitizing what we're doing allows that perspective or allows that to continue to happen and move along much more quickly so we can gain and make a client much more happy because we are moving more quickly.

00:14:29:02 - 00:14:55:13
Jeff Bajek

We are working in the digital environment so they can access what we're trying to work on from a digital perspective. So they don't need to get disrupted in their business. So nCino and any platform that somebody puts into place is going to help the customer experience a lot better. And that's really a critical part in our decision and what every organization should make.

00:14:55:27 - 00:15:49:09
Jeff Bajek

The second piece is really around employees are our platform, and having a more advanced type of system, I believe allows us to attract younger, more talented employees in our organization. You know, the banking industry has been around a long time and there are [inaudible] of us that were a little bit legacy older school type of business. The more technology in the more technical environment that you can bring in allows the employees, the younger employees especially, to look at it and say that this is a forward looking organization, and I want to be part of that because they're constantly trying to innovate and change and adapt to what the external environment is, which is cloud based

00:15:49:09 - 00:16:04:23
Jeff Bajek

technology advancements, things like that. That's what gets employees excited. And I are excited at our organization because that is one of the approaches we take here at Platinum Bank for sure.

00:16:04:23 - 00:16:20:29
Billy Yarborough

And one of the big topics during this virtual event is about financial institutions partnering with what some of these forward looking fintechs like nCino. So what advice do you have around building partnerships to better position your bank to win in this new landscape of banking?

00:16:22:11 - 00:16:54:20
Jeff Bajek

Yeah, I think the most important thing is you've got to get all the key stakeholders involved in the process. And when I say key stakeholders, you have to really think about whatever your fintech solution you're discussing. What is that going to be? What departments is that going to be impacting and bring those individuals into the discussion and into the decision making process so that they have more buy into what whatever that solution is and get more success around it.

00:16:55:04 - 00:17:41:09
Jeff Bajek

So having a single person or a couple of people, you know, making the decisions and doing the assessments, you're going to miss some perspectives that are really important for for every organization that is trying to implement these fintech solutions. The second thing that I do think is pretty critical and pretty important and continue to lean on the younger employees is bring them into the mix they may not have the depth of banking experience, but they have a lot of experience around customer interaction and how they would like to be treated as a consumer of a banking product, especially on the business side.

00:17:42:21 - 00:18:14:04
Jeff Bajek

So I think bringing those individuals in are really critical. And then the third piece that every organization should be looking around is trying to figure out what manual processes that are being completed at your organization and how can you eliminate that manual process and become more productive and more efficient. That becomes really important in the grand scheme of running your organization, especially from an employee base.

00:18:14:05 - 00:18:51:04
Jeff Bajek

And again, I continue to go back to employees and customers. Our employees, especially my credit team, they don't want to be doing administrative tasks. They would rather be knee deep in credit underwriting and digging into financial statements rather than tracking or manually doing some part of that job. So the more I can automate and take that away from them, the happier they're going to be, the more engaged they're going to be, and probably they're going to provide a better value from a credit risk perspective because they'll be more in the know about individual borrowers in the portfolio.

00:18:51:15 - 00:19:23:22
Jeff Bajek

So I really think understanding the impact on your employees and your clients when you're looking at these solutions is really, really important. The last thing that I think is really critical, which I did appreciate about nCino, is don't always buy into the sales pitch that is being made so anybody can pitch you a product and tell you it's going to be the magic wand to solve all of your your issues.

00:19:23:22 - 00:19:41:23
Jeff Bajek

And, you know, that's not always the case. And I do honestly thought it was, you know, did a really nice job of just being realistic about what it's going to take to do something like this, what you're going to get in the end and what the capabilities will look like if you want to put in the time and effort.

00:19:41:23 - 00:19:55:17
Jeff Bajek

So you really have to take some time to think about what you're being quote-unquote sold and how it's going to how much effort it'll take to get implemented into your organization.

00:19:58:02 - 00:20:17:29
Billy Yarborough

Jeff, just want to say thank you for sharing your perspective and your feedback here and your just your overall insights on on your experiences with the nCino platform. We really appreciate Platinum Bank’s partnership and we're looking forward to doing more great work together in the future. So thanks to everyone who joined us for the case study session today.

00:20:18:07 - 00:20:26:18
Billy Yarborough

If you'd like to learn more about the work Platinum Bank is doing, you can find their success story on nCino's website. So thank you and have a great day.

00:20:27:14 - 00:20:29:03
Jeff Bajek

Yeah, thanks. I enjoyed the conversation.