The challenges of Commercial Loan Origination Automation

See AMP Version

It would be unthinkable today to offer a commercial financing or leasing service and to manually calculate, in real time, the data and amounts needed to generate this financing, especially if we consider all the different levels involved; the sales function, the credit department, the risk department, the administrative services and the accounting for the management of the loan or the leasing, etc.

The globalization of markets has led to increased and fierce competition in all sectors and, perhaps even more so, in the banking and financial institutions sector, with the advent of digital (non-human) services and mobile services.

As a result, even for the financing of high-value assets (real estates, specialized industrial equipment, construction site equipment, transport vehicles, etc.) which is a very complex process that takes into account a very large amount of data; business clients are expecting to close a financial transaction in a much shorter time than most financial institutions are capable of.

In general, the financing process goes as follows: 

Financing Process Structure

Financing Process Structure


An organization that needs to focus on improving its financing process must first determine whether a commercial software can meet its business needs WITHOUT the costs of adapting it to its IT environment doubling or tripling the initial purchase cost of the software itself.

If such a product exists and it meets most of the financing needs, it should be selected and a decision should be made for the functions that are not addressed by the product (development or not, development within the product or in a proprietary environment to the organization).

A common mistake that can be very costly is to customize the product too much to the needs of the organization because in many cases, the technology behind commercial products is not very recent and above all, the architecture of these is often “closed” and customization must be done on the product and not in independent classes or APIs. In doing so, the organization is therefore excluded from future developments of the product because at the end of the customization, it is left with a product quite distinct from the original.

In many cases, the peculiarities of the organization, its constraints (laws, languages, types of products, etc.) and its way of doing things aims towards simply developing a tailor-made house solution despite what many IT managers may think. This solution may be less expensive because it eliminates the constraints imposed by a commercial product among which the development technology is frequently obsolete.

In this series of posts, we will discuss the challenges associated with each of the key functions of a commercial financing process to help the reader better understand the issues involved in automating this process.

For this first post, we will focus on the Sales function. Technologically, this function relies on a CRM whose choice will depend on the preferences of the organization; Microsoft Dynamics, SalesForce, etc.

The six main challenges of the SALES function in automating the financing process

To meet the specific needs of the organization and common needs related to the financing process, several features not always well managed by them will have to be added to the CRM:

  1. Sales Objectives Management
    • Per representative
    • Per « branch »
    • Calculation of objectives during a customer transfer between representatives
  2. Territory Management
    • Ownership of clients
    • Batch assignment of customers and prospects to representatives
    • Batch transfer of customers and prospects from a departing representative
  3. Legal Groupings of Companies
  • Parent company with a line of credit
  • Full group with higher CAPEX, which finances at lower rates
  1. The Management of Solicitation Rules
  • Telemarketing
  • Email Marketing
  • Campaign Management
  1. The Business Intelligence of the Organization
  • The specific data required to consider an activity as a call or meeting
  1. The Mechanics of “cleaning” the Database of Customers and Prospects: duplicates, unhealthy data, etc.

Sales Objectives Management

Calculating sales goals is often a black sheep in organizations. I have never met two organizations calculating them in the same way and even, within a single organization, the calculation changes at a regular frequency.

It is therefore important to use a flexible tool to respond to various scenarios. Obviously, Excel is used very often for this calculation and for some representatives, it may be more than enough. On the other hand, it should be used only as a proof of concept if need be to calculate the objectives for a large number of representatives.

Indeed, it will certainly also be necessary to calculate the objectives for parent entities (branches, provinces …) and be able to manage the departure and arrival of representatives during the year. We will certainly not want to transfer the sales results from the old representative to the new one.

I do not think it is wise to add this module to the CRM, it should be independent of it but connected to it.

Territory Management

Assigning a customer list to a representative is not always easy and maintaining harmony within a sales team is essential to individual performance and goal achievement.

Each CRM has its own way of handling the assignment of customers and prospects to representatives, some also allow the assignment of more than one representative to a customer; for example, a primary representative and a secondary representative. Obviously, CRM should be able to manage the roles of users. A representative should only have access to his clients and prospects while his supervisor should have access to all clients and prospects in his area.

Where the situation is getting worse, it is when the large number of customers and prospects and representatives require a batch transfer mechanism between representatives while taking into account sales objectives, actual amounts of sales and groups of companies.

If territory management is not a constraint in your organization and your CRM allows you to meet your needs even if sometimes a few tens (or even hundreds) of customers must be treated one by one, your CRM is your best friend; If not, a tool should be built and again it should not be within the actual CRM.

Business Legal Groupings

Legal groups are another source of discomfort in the financing process. Indeed, clients who are included in a legal group must sometimes be treated as a group and sometimes as a separate entity. For example, when financing a customer belonging to a group, the “Pricing” department will have to consider that the customer belongs to a group and that the applicable rate charter is that of the group.

Similarly, when transferred from one representative to another, a customer who belonged to a group, the entire group will potentially also need to be transferred.

We will therefore require that our CRM allow us to indicate that a customer belongs to a group and that it is able to indicate to other systems that the customer belongs to a group.

Sollicitation Rules Management

Do you do Telemarketing? eMail Marketing? Sollicitation Campaigns?
If so, and the work is done internally, and your CRM meets your needs at this level, that’s great. If this is not the case, you will need to buy a tool dedicated to these functions, a tool that “binds” to your CRM.

However, everyone knows that in Canada, since July 2014, businesses are governed by the C28 SPAM Act. It is therefore important that your CRM has the data to comply with this law. For example, a prospect who has made a request to “unsubscribe” should be treated this way in subsequent shipments, so this information must be present in the CRM.

Company Business Intelligence

Each organization has a set of rules governing its activities. What is the minimum of information necessary to consider that a “meeting” is considered a “meeting” at the level of objectives? Should this large client be met by a representative alone or only with his superior.

Two simple examples that demonstrate that a “vanilla” CRM does not really exist and that we must customize it to the flavor of the company to make it more efficient.

Database Cleaning Mechanism

Many CRMs have features that minimize data corruption. For example, validating the existence of a client during a new addition.

Unfortunately, I know few CRMs that only have “clean” data after a few years of use. Worse, if you add lists of customers purchased or solicited by an external telemarketing firm, the data corruption will be at its best.

If the amount of data is not too large, the “clean up” must be done manually and will sometimes require several weeks of work. When the volume is important, it is necessary to use a specialized tool for this purpose. Unfortunately, this tool is not in the yellow pages and it will need to be developed “in-house”!


The main tool of the sales function is the CRM. The choice of this one is really a story of taste… and means. “Commercial” or “Custom”, “on the premises” or “Cloud”; you decide.

Do not forget the customization costs that will be needed.

Finally, if your customer database is important, some in-house tools will need to be developed to address some of the challenges mentioned above.

Leave a Reply

Your email address will not be published. Required fields are marked *