Results of survey of North American bank executives reveals how to simplify, streamline and continuously improve the loans, credit and financing processes within their organizations. Visit http://www.OpenTextBPM.com for more information.

1. Mending Lending: Trends &
Best Practices to Improve
Loan Processing
Deb Miller, Director of Industry Marketing
@DebsG360
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Copyright © Open Text Corporation. All rights reserved.

2. Today’s Discussion
Industry Executive Best Practices
Trends in Survey Says… in Operational
Lending Excellence
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3. What’s Impacting the Market?
Lenders are facing significant challenges and
increasing complexity…
Multiple sophisticated channels Social
Regulatory changes Mobile
rising risk
Multiple brands M&A
Legacy systems Margins shrinking
Consumer fears escalating
Currency values fluctuate
Silo’ed business structure
Information and paper overload
Complex products & customer relationships
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4. Loan Processing Performance
Complexity impacts cost, efficiency and cycle
times…
Drivers of
complexity:
Corporate Clients  Regulation
 Internal processes
Commercial Client  Number of players/actors
 Number of channels
Complexity
 Level of integration (a
Mortgage Loan
double-edged sword)
 Existing IT architecture
Consumer Loan  Existing application
portfolio
 Number of business
Checking account
partners
Time
Source: CEB TowerGroup
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5. The Regulatory Fog Continues
Dodd-Frank hurdles will unfold throughout the
decade…
Category Number of Rules
 Only 26% of these
281 rules are final Derivatives 36 44 13 2 95
 38% of rules
Consumer
missed deadlines Protection
24 3 36 63
Finalized
 Consumer Banking
protection rules are Regulations
4 36 4 44
Missed Deadline:
on time  
Proposed
Mortgage 43
 The “best” of Reforms
33 37 Missed Deadline: Not
mortgage reform is Proposed
yet to come Credit Rating Future: Proposed
Agencies
3 14 4 22
 Compliance change
ABS Future: Not Proposed
is a long-term 2 12 14
issue; so should Offerings
FSI strategy, relying
on automation for 0 20 40 60 80 100
cost efficiency
Source: DavisPolk; Dodd-Frank Act Rulemaking Progress in Select Categories (March 1, 2012)
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6. Loan Origination
Costs Remain High and are a Concern…
40% increase
U.S. Origination Cost
Per Loan
15% increase
7.5% increase
2007 2011 2007 2011 2007 2011
Automobile Home Equity Mortgage
Source: Federal Reserve Bank of New York; CEB TowerGroup.
Note: Mortgage origination costs per loan are scaled at 10 times that of other costs to fit on graph.
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7. Summary: Lending Institutions Face Strong
Market Forces
 Uneven growth prospects across loan products and
country markets
 Impact of sovereign/banking crises on lending
 Regulatory pressure on revenues and process
 Declining consumer employment/income growth
 Ongoing legal, delinquency and credit risks
 Trust and high customer expectations
Source: CEB TowerGroup.
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8. Lending Institutions Are Using Technology
to Respond to their Challenges
Top 10 Technology Initiatives for Consumer Lending (2012)
Compliance Integrated credit, Redefining and Data Enterprise-wide
technology to collateral, and restructuring management customer-centric
reduce fraud risk core processing and foundation decisioning -
regulatory risks assessment to IT and alignment for “next best
manage risk and operations business action”)
revenue goals intelligence
Enterprise Customer Optimized IT and business Channel
content and lifetime product process experience
process profitability bundling, pricing, outsourcing for alignment and
management for measurement and positioning strategic cost personalization
cost takeout and and analysis management
efficient
processing
Source: CEB TowerGroup.
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9. Today’s Discussion
Industry Executive Best Practices
Trends in Survey Says… in Operational
Lending Excellence
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10. Survey Results:
Trends in
Optimizing Loan
Processing
May 2012 Peer Survey
Conducted by GatePoint Research
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11. Why do a survey?
Get a snapshot of the challenges and the responses…
BPM
Optimization of “broken”
processes is driving BPM
adoption in Financial
Services
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12. Who participated in the survey?
Line of Information Loan Branch Other
Business Technology Operations Operations Functions
27% 24% 14% 4% 31%
87% of survey responders are VP Level or above
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13. Survey Demographics: Institutions
Credit Union Other
5% 9% Community
Global Bank Bank
12% 43%
Regional
Bank
31%
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14. Survey
Question Performance
Survey Question:
How would you
describe your current
loan processing
environment?
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15. Loan performance environment
8% Excels 12%
Lagging the
Competition
33%&
Smooth
45%
Adequate
Efficient
OpenText Confidential. 15

16. Initiatives
Survey Question:
Do you have a current
initiative to improve
loan processing
workflow?
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17. Do you have a current initiative to upgrade or improve
the loan processing workflow?
39%
67% Actively involved
or expecting a near term
improvement initiative
18% 19%
14%
10%
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18. Concerns
Survey Question:
In what lending areas
are you most
concerned about
current performance?
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19. In what lending areas are you most concerned about
current performance?
(Check all that apply)
Student loans
73%
Commercial loans Automotive
5% 19%
22%
Small business loans 47% Personal lines of credit
30%
42%
Mortgage Credit cards
When considering current lending performance,
responders worry most about commercial loans.
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20. Priorities
How did the survey
responders rank
priorities for improving
loan processing?
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21. Priority #5
Improve
management
visibility into the
process
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22. Priority #4
Remove paper
from the process
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23. Loans 5¢
Priority #3
Reduce the cost of
processing a loan
The Loan Processor
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24. Priority #2
Reduce loan
process cycle time
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25. Priority #1
Optimize and continuously improve
processes across the business
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26. Today’s Discussion
Industry Executive Best Practices
Trends in Survey Says… in Operational
Lending Excellence
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27. Leaders are effectively controlling cycle time
and costs…
Loan Origination Cost Benchmark
Low Avg High
Laggard $5,600 $2,865 $750 $250 $75
Industry $53
Average
$1,936 $505 $168
$3,405
$1,007 $260 $85 $31
Best in class
$1,210
Commercial Mortgage Home Consumer Credit Cards
Equity Loan
Source: CEB TowerGroup and OpenText BPS
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28. Case Study: A Major National Bank
 Cost of processing a loan > benchmark
Problem  Cycle times are twice customer expectations
 Need to manage error rates & improve customer satisfaction
 BPM and Case Management to
streamline the process and ensure
compliance
OpenText  Orchestrate and simplify loan
Solution processor validation and exception
handling
 Dashboards for real-time visibility
OpenText Confidential. 28

29. Focus on Achieving 3 Key Goals
Improve
Customer
Experience
Enable
Efficiency and
Line of sight to Compliance
business goals
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30. Loan Processing Solution Where is my loan
application?
Have I balanced
Customer the workload?
Account Info
What is
happening
in my dept?
Capture
Docs
Loan Application Loan Application Processor Underwriter
is scanned and reviews loan reviews loan
indexed
Approved?
Book Loan
Rejected?
Notify
Customer
Other Automate
Docs Tasks
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31. Deliver Productivity Results For Key
Personas Automate for data
quality and process
compliance
Support Staff
Loan
Proactively Processors
address issues
with non-value add
Dashboards value-add
Focus on
enabling
human
judgment
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32. Loan Processor Workbench
Data specific Document
to the viewer
document and
the case
Notes
Integration to
back end List of actions
systems to be
completed
Alerts (e.g. for missing
required documents
within the package)
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33. Thank you.
Learn more about OpenText
Business Process Solutions
for Financial Services
www.OpenTextBPM.com
Participate in the Global Lending Survey today!
www.opentextbpm.com/lendingsurvey2012
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