3 Reasons Why You Shouldn’t Replace Credit Managers with Automation

Over the course of time we’ll explore the various drivers for automating credit assessment, loan origination and decisioning but today let’s talk about lowering overheads. Cost-reduction is always a top motivator for any level of automation. Every business, no matter what industry they are in, is constantly looking at ways to do more with less.

By automating your business processes, whether it’s in the application process, risk-assessment process or simply driving best practices throughout your organization, you are cutting down on wastages in multiple resources – time, effort, materials and financial losses due to risk. It’s a no-brainer really, but when it comes to cost-reduction, it can sound off some alarm bells at the ground level. From the manager’s perspective, software solutions that can bring around cost-efficiency are worth a look at, but will it gain acceptance from the actual users of the proposed system?

Are we going to be replaced by software?

It’s understandable that your credit team will feel a bit iffy about workflow automation tools potentially making them redundant. These are valid concerns and they must be addressed early in the stages of considering a decisioning solution. If these concerns are allowed to become deeply-seated, they turn into push-back and resistance to change, which is a significant challenge to the successful implementation of any digital transformation project.

Essentially, the answer to the above question is ‘NO’. Credit managers, underwriters and so on shouldn’t and can’t be fully replaced by software. Some might argue that it defeats the purpose of a system meant to reduce cost. Far from it. There are several layers to a digital transformation journey that leads to long-term cost reduction as well as increase in profit. To begin realising those benefits, the venture must be successful to start. Borrowing from the manufacturing best practices mantra of “People, Process, Product”, these three key ingredients are essential in approaching any improvement drive. Without the people, the product (in this case the system) would end up under-utilised, and therefore considered a non-performing investment.

In the following sections we look at 3 main reasons why you shouldn’t jump to replace credit managers with technology.

Retain Indispensable Experience and Know-how

Successful businesses invest in their workforce, and over time, these professionals grow and develop in their skills and knowledge, be it qualitative or quantitative. It’s the intrinsic value of people that may seem at the outset easy to replace but are in fact a huge asset to the business over the long-run. The loss incurred to the business when an experienced team member leaves or is made redundant is incalculable as it would take a significant gap in time to re-train a new team member, not to mention the loss of invaluable experience and insider knowledge that goes away with that individual. This is more so for credit managers as they would have gained insights of the ins and outs of the market they serve, the quirks in their organisations and developed intuition that can only be gleaned from years of experience.

Automation leads to greater efficiency and business success, but a tool can only be as useful as its user. Without the knowledge and expertise of Credit Managers to continuously challenge and improve the solution, as well as their willingness to fully utilise it, even the best and most expensive of decisioning solutions will eventually become a white elephant.

Maximise the Potential of Your Credit Team

The objective of automating your business processes is to better manage your data, automate known repetitive tasks, facilitate consistency in decision-making and provide fast access to data for further analysis.

By providing all the necessary data and functionality to facilitate daily credit assessment and loan approval, this frees up precious hours and minutes of your credit team’s productivity time. Reducing manual data entry and providing automated decisions on black-and-white applications enables them to focus on more complex cases which requires in-depth evaluation.

Their expertise and the increased productivity time can be applied to strategic business planning tasks including the study and development or further improvement of decisioning criterion, as well as the setup of internal application scorecards. Both of which need a cycle of continuous study, adapting and tweaking in line with the organisations goals, risk appetite and market movements.

In terms of dollars and cents, this translates to more effective employment of the skills of various members of the team, allowing them to realise their potential and add further value to the business. This also opens up new opportunities for the business and individuals to continue growing and developing skillsets to better tackle oncoming future trends and changes in the sector.

Essentially, let software manage the tedious tasks and allow credit experts to do what they do best.

Continuously Improve People and Process

You’ve made the right move by setting your organisation down the path of digitisation. Is this it? Not quite, because the world will keep spinning, customers demands will evolve and so should your organisation.

By fostering collaboration between your existing team and the new tools put in place, you will ensure that the investment to go digital will provide returns for the long term. Winning over credit managers to fully embrace technology and what it can do for them will lead to a stronger sense of ownership and desire to keep pushing the limits.

Software solutions don’t improve themselves. They need the feedback of the industry, and most importantly users, to make them truly fit for purpose and relevant to the individual organisations. With the understanding credit managers have of the business, they will be able to continuously drive improvements in workflow and the system’s functionality, in turn providing them new opportunities and challenges within the organisation and business as a whole.

Understanding the benefits of maximising resources in conjunction with the right systems is key to a positive start to implementing such solutions. While each organisation may take varying routes to achieve the same goal, ultimately it is the creation of a symbiotic relationship between experienced employees and new technology that will keep paving the way towards an innovative financing sector.

Stay tuned to our blog for further insights into digitisation strategies, credit and risk. Follow us on Linkedin and Facebook to receive updates.

About the Authors

About Us