What does the future of credit risk management look like?

Giulio Camerini, Steve Krase
What does the future of credit risk management look like?

Recent shifts in the credit risk management field promise to shake up loan review departments for years to come.

The COVID-19 pandemic and the switch to remote or hybrid work prompted many experienced loan review and credit specialists to retire earlier than planned. Many organizations are seeing additional members of their teams move to other lines of work, and loan review departments are scrambling for new talent to fill these gaps.

At the same time, many banks have continued to grow during the pandemic. Organizational mergers and acquisitions have led to larger and more complex loan portfolios for teams to manage.

All these changes can place strain on a loan review department in several ways:

  • A lack of experience and knowledge about the organization’s portfolio
  • Difficulty in attracting and onboarding new hires
  • An overall reduction in qualified staff

Lending and credit departments that loan review specialists interact with are also struggling with similar issues. The pressures on those other departments can lead to more errors, miscommunication, and missing loan information, all of which can slow down loan review specialists and compromise their work.

Remote work is here to stay, and your processes should meet your teams where they are

Remote work is here to stay, and your processes should meet your teams where they are - Exceed productivity levels even when working remotely

If your organization has adopted a partial or full work-from-home policy, it’s critical to have the right elements in place so your loan review team can remain efficient. Processes, procedures, and tools that functioned well enough in an office-based environment might not provide the same results when working remotely.

If your loan review specialists frequently found themselves chasing down the information they needed before incorporating remote work, imagine how much more difficult it can be now when the people who have that information are spread out over various geographic regions or time zones.

Entering and organizing the information loan review specialists rely on can also become more challenging when departments are connected remotely. A centralized hub for documents and communication is critical to avoid missed deadlines and stalled progress.

With effective software tools in place to accommodate the remote working needs of the department, your loan review specialists should be able to meet or even exceed the levels of productivity they achieved in the office. Without the right tools in place, productivity can drop, and the consequences tend to snowball through connected departments.

Efficiency gains from technology can reverse the crunch for credit risk review

Efficiency gains from technology can reverse the crunch for credit risk review

If loan review departments needed to proportionally scale up their workforces as their portfolios grew, then the future of credit risk management would be one of ever-increasing costs and talent needs. Fortunately, doing more with less does not have to mean exposing your organization to greater risk of error, unacceptable levels of credit risk, or staff burnout.

Outsourcing can fill in the gaps and help loan review departments become more productive than ever, and technology solutions can be critical additions to your organization’s loan review function. Implementing a cloud-based hub, automated processes, and visual insights from data analytics can relieve loan review specialists of performing time-consuming manual entry tasks. Instead, they can focus on making thorough assessments of risk in your organization’s portfolio.

The future of credit risk management will present challenges for organizations of all sizes. Preparing now can help your organization adapt to the changes, overcome the obstacles, and derive more value and better insights from your loan review function.

Let’s talk

Crowe Credit360 for Loan Review Departments is the complete loan review software solution that loan review specialists need now more than ever. Contact our loan specialists to learn more about Crowe Credit360 for Loan Review Departments, schedule a demo of our software, or discuss options to assist your loan review team.
Guilio Camerini
Giulio Camerini
Principal, Financial Services Consulting
Steve Krase
Steve Krase
Principal, Financial Services Consulting