In this webinar from Sageworks (see recording: http://web.sageworks.com/eliminate-manual-data-entry/), consultant Bryce Lugar reviews best practices for document management in the life of the loan, explaining how banks and credit unions can reduce paper waste, inefficiency and data risk in credit analysis.

1. Eliminating Manual Data Entry: Best Practices in Document
Management
May 23· 2017
Streamline your document management process to reduce errors, improve the
borrower experience and increase profitability
Bryce Lugar
Senior Credit Risk Consultant
bryce.lugar@sageworks.com
PRESENTED BY

2. About the Webinar
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3. About Sageworks
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4. About Sageworks
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5. 2017 Risk Management Summit
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The premier conference for lending and risk
New expanded agenda to include lending, credit and portfolio risk!
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» Sessions dedicated to lending, credit risk and
portfolio risk
» Led by industry experts to address your
challenges around growth and risk
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attend
• Apply:
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» Offers actionable next steps regarding
business loan growth and portfolio
management
Sageworks.com/Summit

6. Disclaimer
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This presentation may include statement that constitute “forward-looking statements” relative to publicly available industry data.
Forward-looking statement often contain worlds such as “believe,” “expect,” “plans,” “project,” “target,” “anticipate,” “will,”
“should,” “see,” “guidance,” “confident,” and similar terms. There can be no assurance that any of the future events discussed will
occur as anticipated, if at all, or that actual results on the industry will be as expected. Sageworks is not responsible for the
accuracy or validity of this publicly available industry data. Sageworks disclaims all representations and warranties, express or
implied. Risks and uncertainties include risks related to the effect of economic conditions and financial market conditions;
fluctuation in commodity prices, interest rates and foreign currency exchange rates. No Sageworks employee is authorized to
make recommendations or give advice as to any course of action that should be made as an outcome of this data. The forward-
looking statements and data speak only as of the date of the presentation and we undertake no obligation to update or revise this
information as of a later date.

7. Sageworks ETRR
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“I can process 3 returns in the time it takes someone else to
do 1, which is a huge difference. The quicker these numbers
can be delivered to the officer, the quicker the bank can get
answers to customers. It really gives us that step ahead of our
competitors, it frees up time that loan officers would be
spending on underwriting and allows them to get out there
and meet with customers and build the portfolio.”
- Lisa Kerschner, Union State Bank

8. About Today’s Presenters
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Bryce Lugar
Senior Credit Risk Consultant
bryce.lugar@sageworks.com

9. Sageworksanalyst.com
Agenda
• Introduction
• Industry Observations
• Electronic Tax Return Reader (ETRR)
• What Is It?
• In-Product Technology & FAQ
• Annual Review & Document Collection
• Strong Foundations
• Improving Borrower & Banker Experience Simultaneously
• Application Strategy: Digital Origins
• Synthesis & End In Mind
• Questions
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Industry Observations
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Changing Demographics
Competition
Compliance

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Disconnected Systems & Manual Re-entry
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Loan Growth vs. Loans per Employee Growth
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-5.00%
0.00%
5.00%
10.00%
15.00%
6/30/2004
9/30/2004
12/31/2004
3/31/2005
6/30/2005
9/30/2005
12/31/2005
3/31/2006
6/30/2006
9/30/2006
12/31/2006
3/31/2007
6/30/2007
9/30/2007
12/31/2007
3/31/2008
6/30/2008
9/30/2008
12/31/2008
3/31/2009
6/30/2009
9/30/2009
12/31/2009
3/31/2010
6/30/2010
9/30/2010
12/31/2010
3/31/2011
6/30/2011
9/30/2011
12/31/2011
3/31/2012
6/30/2012
9/30/2012
12/31/2012
3/31/2013
6/30/2013
9/30/2013
12/31/2013
3/31/2014
6/30/2014
9/30/2014
12/31/2014
3/31/2015
6/30/2015
9/30/2015
12/31/2015
3/31/2016
6/30/2016
9/30/2016
12/31/2016
3/31/2017

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Loan Growth vs. Loans per Employee Growth
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-5.00%
0.00%
5.00%
10.00%
15.00%
6/30/2004
9/30/2004
12/31/2004
3/31/2005
6/30/2005
9/30/2005
12/31/2005
3/31/2006
6/30/2006
9/30/2006
12/31/2006
3/31/2007
6/30/2007
9/30/2007
12/31/2007
3/31/2008
6/30/2008
9/30/2008
12/31/2008
3/31/2009
6/30/2009
9/30/2009
12/31/2009
3/31/2010
6/30/2010
9/30/2010
12/31/2010
3/31/2011
6/30/2011
9/30/2011
12/31/2011
3/31/2012
6/30/2012
9/30/2012
12/31/2012
3/31/2013
6/30/2013
9/30/2013
12/31/2013
3/31/2014
6/30/2014
9/30/2014
12/31/2014
3/31/2015
6/30/2015
9/30/2015
12/31/2015
3/31/2016
6/30/2016
9/30/2016
12/31/2016
3/31/2017

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Bankers Making Paper
• Traditional Processes Yield Physical Documents
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This Sets Precedent:
• Initial Document Acquisition - Paper
• Manual Data Entry (Administrative, Financial)
• Duplication of Efforts
• Storage
• Repeat Process at Review
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The Paper Road To Approval
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Application Underwriting Credit Memo Boarding Imaging/Storage

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Review Follows
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The Logical Question(s)
• How can we reduce manual entry and redundancy?
• How do we get our borrowers to buy in?
• Where do we start?
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Electronic Tax Return Reader
• Upload & Automatically Spread Tax Returns in Minutes
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Why Start Here?
• Tangible time reduction in underwriting
• Speed to borrower
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ETRR In-Product Demo
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ETRR FAQ
• What forms are compatible?
- Original PDF outputs from tax preparation software
• How do we increase proper acquisition?
- Borrower Education
- Borrower Incentive
- Straight-to-CPA Requests
- CPA Networking
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Annual Review & Document Collection
• Strong Foundations & Stronger Strategies
• Improving Borrower & Banker Experience Simultaneously
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The First Step – Strong Foundations
• Tiered contact schedules for document requests
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The First Step – Strong Foundations
• Tiered contact schedules for document requests
- A Good Example:
• First Request – Letter – 45 days before due date
• Second Request – Email – 20 days before due date (if unreceived)
• Third Request – Phone Call – 10 days before due date (if unreceived)
• Past Due – Phone Call – 1 day past due
• Past Due 2 – Letter – 10 days past due
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The First Step – Strong Foundations
• Modern software can handle custom rules in Example.
• This can be scaled to fit institutional preference.
• Flexible to be adjusted over time.
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Improving Borrower & Banker Experience..
Simultaneously: Provide a digital portal for document collection
• Remove borrower need to physically visit branch.
• Acquire documents securely, digitally, and in less time.
• Expand on best practices – consent to go to the source.
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Improving Borrower & Banker Experience
Simultaneously:
A Better Example (to borrower):
• First Request – Letter – 45 days before due date (mention portal email)
• Second Request – Email – 40 days before due date (include portal)
• Third Request – Phone Call – 15 days before due date (mention portal)
• Fourth Request – Email – 15 days before due date (include portal)
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Example of Correspondence
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Secure Portal with Sageworks
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Improving Borrower & Banker Experience
Simultaneously:
A Better Example (to vendor):
• Email listing all documents required for all mutual clients (with portal)
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This Solves For
• Increased digital documents (paper-free)
• Better borrower experience
• Faster turn-around / timely review
• More automation for tickler tracking
• Proper avenue for Electronic Tax Returns
• Decreased need for imaging
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One Last Item
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Sageworks Client Portal + Borrower’s Electronic Tax Return =
1. Automatically Spread Tax Return
2. Auto-Received Tickler
3. Document Stored

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Application Strategy: Digital Origins
• Setting precedent up-front
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Replace Paper Application with Digital Application
• Outsourced data entry from the start
• Document acquisition is electronic – no paper
• Customized to look & business requirement needs
• Can be done in-branch or at home
• Depending on appetite – could live on bank website
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Sync with Institution Website (white-label)
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Sageworks Loan Application
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Synthesis
• Simultaneously Improving Borrower Experience Plus:
- Employee Experience
- Institution Efficiency
- Reduced Data Entry & Manual Error.
- Decreased Turnaround Time
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The End In Mind
• If Alternative Lenders/FinTech are the catalyst for this – we lose.
• If Community FI’s are the catalyst – we win.
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40. Poll Question
What applications do you think eliminating manual data entry would be most
useful for your institution?
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Faster loan origination turn-around times
Loan administration/annual reviews/renewals
Implementing a digital loan application
Improving accuracy when spreading financials

41. Questions?
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Bryce Lugar
Senior Credit Risk Consultant
bryce.lugar@sageworks.com