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Laurentian Bank
A Success Story Amid the Crisis
Over the course of Laurentian Bank's 162 year history, they have enjoyed considerable growth and, for the past 5 years, have expanded at a pace faster than their competitors. In fact, despite the recent credit crisis, Laurentian was able to grow all of their key performance metrics, including total assets that expanded by 10% to $19.6 billion in 2008. In a year that was difficult for many banks, Laurentian enjoyed a 9% increase in net profit. They credit their success during tough times to an intense focus on delivering service excellence with a human touch, and continuously working to optimize key processes.
The Challenge:
Strengthening Commercial Loan Management
In 2006, Laurentian identified commercial loan monitoring as a key area for which automated processes would have a profound and positive effect on their business. The company foresaw that significant efficiency and profitability gains were possible with this initiative, and also believed it would increase their competitiveness by tightening risk management practices and enhancing borrower relationships.
The Solution:
After extensive review, Laurentian selected Covarity as its partner to implement and establish a consistent framework for commercial loan monitoring and portfolio management. Laurentian integrated Covarity as a key component of MAXAFFAIRES - their full suite of online financial services for their commercial clients.
The Result:
Increased Efficiency and Productivity
Although confident in the pre-Covarity process and controls of their manual monitoring process, Laurentian realized that it was highly inefficient. The process involved a sizable team of analysts inputting data and conducting fairly complex analysis using Excel. Specifically, prior to working with Covarity, it took 89 minutes on average to conduct a loan review, done manually on a monthly basis for the majority of their accounts. The Covarity solution automated the process end-to-end. Laurentian was able to increase overall control, consistency and accuracy of their portfolio and sharply decrease the time it took to review a single loan. "With Covarity, our analysts now spend less than 13 minutes conducting an individual loan review allowing us to reduce our headcount," explains Yvon St. Pierre, VP Commercial Services at Laurentian. The result exceeded expectations - time spent on regular loan reviews has been reduced by 85 percent.
Tightened Risk Management Practices
Laurentian was confident in the quality and strength of their risk management practices but they were looking for a way to go one step further. The company saw the advantages of a system that enhanced their ability to make faster and better decisions regarding loan quality. For Laurentian, default loan reduction was critical to improved profitability.
With Covarity, Laurentian now proactively manages the health of their entire commercial portfolio. At any time, account managers can see what's happening in their portfolio and be alerted to at-risk loans. They can quickly link to details, conduct analysis and determine who's at risk by uncovering negative trends. Because reviews are processed without time delays and errors - related to manual data entry and analysis - are removed, the information being monitored is accurate and timely.
Transparency with Commercial Borrowers
Laurentian is always looking for ways to improve the banking experience for their clients. Prior to Covarity, borrowers faxed, mailed and emailed their statements (either monthly or quarterly) into the bank. The data was then manually inputted into Excel spreadsheets for analysis. Laurentian wanted to ease the exchange of information between their lending team and borrowers by allowing them to automatically upload their financial statements.
With Covarity fully integrated into MAXAFFAIRES, Laurentian borrowers are now able to view key financial information, such as available credit and changes in key financial ratios, and see for themselves any "highlighted" unfavorable trends. Laurentian has gained a valuable competitive advantage using Covarity: their commercial borrowers are reluctant to switch banks due to the high value of this service. |
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