Commercial and Equipment Finance Providers Focus on Process Improvement and Integration

CapitalStream and Northern Consulting announce the release of the 2003 Commercial and Equipment Finance Survey Report focusing on what banks and finance companies are doing to more efficiently originate loans, leases, lines of credit, asset-based financing and other commercial and equipment finance instruments. The survey was conducted with over 200 commercial lending and banking executives to determine how financial institutions are managing their relationships, improving their processes and enhancing their systems to grow their business.

"The top issues uncovered by the survey indicate that the industry is frustrated by poor systems integration and inefficient front office processes that have made relationship management, credit analysis and transaction origination incredibly difficult," said Kevin Riegelsberger, President and CEO of CapitalStream. "Results from this survey provide a roadmap to help industry executives improve process effectiveness as growth, consolidation and competition drive the need for greater productivity and responsiveness."
The survey reveals quite a disparity between the success of different organizations in implementing best practices and improving process effectiveness. The time it takes to respond to a customer request is a good indicator of the effectiveness of an organization, and the results vary significantly between respondents. For example, the time to issue a mid-ticket quote ranges from instantaneous to 10 days and the time from quote acceptance to document delivery ranges from one hour to 3 months.
"Small and mid-ticket lenders and lessors that deliver quotations immediately and documents in less than an hour tend to win more market share," said Cameron Krueger, Managing Director of Northern Consulting. "In a continuing trend industry leaders are focusing on improving responsiveness and efficiency by implementing Front Office Automation systems. There is a significant push to replace manual processes and stand-alone systems with integrated platforms to allow companies to focus on true competitive advantages, not operational issues."
Survey results indicate that current processes and procedures, along with the systems that manage them, are inadequate to support expected transaction volume. Over 80% of systems have been implemented as stand-alone islands of information so data is frequently being re-entered, often multiple times between different systems. Lack of integration was the primary source of inaccuracies, inefficiencies and delays. As a result, systems integration was reported as the top priority of all IT initiatives over the next 2 years. The survey reviews which systems are being used for credit, pricing, documentation and accounting and how well each has been integrated.

Research was conducted from July to September 2002. Preliminary results were presented in October at the American Bankers Association Annual Conference and the Equipment Leasing Association Annual Conference. The final report was released this week to survey participants and can be requested from the CapitalStream website at http://www.capitalstream.com or from Northern Consulting at http://www.NorthernConsulting.com.

Sandra Sick
Capital Stream, Inc.
206-548-1703
sandras@capitalstream.com