AFS Commercial Loan Origination™

Overview

AFS Commercial Loan Origination streamlines, tracks, and controls the entire commercial lending origination process by automating information-gathering, decisioning, underwriting, document preparation, and loan booking tasks. As the fully integrated front-end of the AFS straight-through processing business model, the system creates dramatic efficiencies through its built-in workflow management logic and systems connectivity capabilities.

Implementation execution is key to maximizing results the system offers. To that end, AFS Commercial Loan Origination implementation encompasses system customization using business rules developed from a bank's own policies, product definitions, user roles, and operating procedures, as well as the application of AFS' industry "best practices" expertise.

Rules-based systematic management of loan origination and its associated processes reduces credit and operational risk by reinforcing credit policy, providing an audit trail for decisioning, identifying operating exceptions, and ensuring completion of documentation requirements. Automation of this process provides consistency in the organisation's response to credit requests and reduces staff time to process loans. Customer response is faster, and service staff has the ability to view deal structures and track the status of loan requests on-line to respond to customer inquiries.

AFS Commercial Loan Origination addresses both origination and workflow. As an origination tool, AFS Commercial Loan Origination captures and processes all information necessary to evaluate, structure, and book any type of commercial loan.

As a workflow tool AFS Commercial Loan Origination identifies tasks in the loan process, establishes criteria for reviewing those tasks, and identifies those who can make or override credit decisions, etc. These processes are managed by using the defined roles and milestones. Once a commercial loan is approved, it automatically loads the information into the loan accounting system to set-up the loan.

AFS Commercial Loan Origination is comprised of origination and workflow components. In addressing origination, AFS Loan Origination captures and processes the information necessary to evaluate, structure, and book any commercial loan. Customer information captured in the origination process is maintained and used throughout the organisation as needed for credit analysis, documentation, collateralization, and processing. As incremental data elements are added throughout the decisioning process, they are made available to credit analysts, underwriters, and review authorities as needed to complete processing of the loan request.

As a workflow management system, AFS Commercial Loan Origination guides staff through completion of each task in the lending process -- assigning responsibility, regulating the flow of work, establishing criteria for review and completion, monitoring timing, and identifying exceptions. Management reporting provides an audit trail of personal accountabilities, as well as process bottlenecks or failures, pinpointing the need for corrective action.

AFS Loan Origination provides value by enabling a bank to manage risk, cut costs, and generate revenue.

  Manage Risk: AFS Commercial Loan Origination provides accountability by building bank policy into daily processes that are systematically monitored. Exceptions are identified and reported so that immediate attention can be focused on corrective actions, preventing losses. AFS Loan Origination mitigates:
  Credit risk, by identifying credit policy exceptions and improving compliance, including consistency in decisioning treatment of loan applications and the identification of unauthorized credit approvals or overrides
  Operational risk, by monitoring loans from first point of origin to booking-identifying process anomalies, including pricing and collateral exceptions, fee waivers, and missing or incomplete documentation
  Regulatory Exposure, by providing the ability to capture and report more in-depth information on customers, facilitating "know your customer" accountabilities and supporting expanding internal audit informational needs. Through its integration with the AFS Level III Loan Accounting system, provides access to total exposure by customer for decision-making.
  Cut Costs: By automating many of the processes that have historically been manual (decisioning, document production, perfection, customer notification, repetitive data entry) and by tracking individual performance, AFS Commercial Loan Origination reduces costs. Typically, the system automates 80% of commercial loan origination tasks and eliminates the remaining 20%.
  The system gathers and integrates information from internal and external sources (including loan accounting, credit analysis, and credit reporting databases) to facilitate faster, more educated decisions on complex deals.

Additionally, significantly less staff time is required for manually intensive error research and resolution. Reporting focused on productivity management enhances time to market, turnaround, and staff efficiency.

  Generate Revenue: AFS Loan Origination assigns fees and reviews rates in accordance with bank policy for each lending product as a loan is booked. AFS Loan Origination clients achieve increases of three to five basis points on their portfolios attributed to the management of pricing exceptions. Revenue accrues earlier in the process due to faster booking; and delinquencies are monitored to reduce losses.

AFS Commercial Loan Origination:

The AFS Commercial Loan Origination system encompasses several significant commercial lending processes-application, underwriting, and approval/notification-as follows:

  Application:
  Accepts "applications" or credit requests from authorized users (commercial lenders, private bankers, etc.)
  Tailors electronic credit request or credit authorization to the bank
  Captures all information required to approve, close, and book the loan
  Interfaces to a document preparation system to complete and print loan documentation
  Adds guarantors to the loan at any time during the process
  Interfaces to statement spreading tools
  Includes important fields from the financial statement spreads in the credit request
  Can be tailored to any lending environment or commercial credit product
  Holds, accumulates, and electronically routes credit information
  Underwriting:
  Determines required approval authorizations
  Forwards approval request to appropriate person for a credit decision
  Provides unlimited space for underwriting memos
  Enables loan characteristics to vary based on product type
  Manages pricing, billing, collateral requirements, and documentation requirements using product characteristics based upon business rules (for example, fee assessments can be automatically enforced according to product type)
  Manages credit limit increases
  Tailors underwriting tasks to the particular loan product requested
  Approval/Notification:
  Notifies lenders of declined deals
  Asks lenders, in approved deals, for any additional information needed to close the loan
  Notifies lenders that deals are ready to close, after documents are prepared and additional information received
  Captures an unlimited number of related fees, which are booked to the loan accounting system for revenue tracking
  Automates booking of the borrower, obligation, collateral, and guaranties to the loan accounting system

Additional features of AFS Commercial Loan Origination include workflow, covenant monitoring (optional), and the ability to interface with other lending products:

  The system's workflow capabilities:
  Provide graphical representation of workflow steps, which enables forward and backward navigation through the process
  Are customized to bank requirements
  Manage the loan processes using defined roles and milestones
  Ensure that information is complete before being released to the next step
  Automatically routes the loan to the appropriate approval person, based on parameters established
  Facilitate loan status tracking using process milestones (search for loans in process, determine what information has been received, and view comments about the customer)
  Communicate underwriter decisions to the originating party, eliminating time-consuming phone calls or e-mails
  The system's Covenant Monitoring (optional):
  Establishes financial covenants on the database
  Enables selection of covenants from a standard set or establishes custom financial covenants, prior to documenting a loan
  Automatically monitors customer compliance
  Interfaces with spreading software and imports fields required to perform covenant calculations as financial statements are received and spread
  Interfaces (all optional except the Level III interface) include:
  Statement spreading packages: Moodys MFA, STAN
  Loan documentation packages: Laser Pro, Adobe (Jet Forms), HotDocs
  Credit agencies: D&B, TransUnion
  Word processing packages
  Level III
  Imaging systems
  Fair, Isaac
  Bank CIF system

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