Time is money, and entrepreneurs never seem to have enough ofboth.

This is particularly true for small business owners who canspend hours filling out a tsunami of documents to apply forgovernment-backed loans. And when the exhaustive paperwork finallyplods through an esoteric loan processing system, all smallbusiness owners can do is anxiously wait…and wait.

Credit union executives know this is not the ideal memberservice scenario, yet they may be hamstrung by loan processingsystems that haven't kept up with the accelerated pace of today'sbusiness markets. Now more than ever, entrepreneurs under fiercecompetitive pressures need better and faster service from theirfinancial services partners. For credit unions, better and fasterservice is a key differentiation point that can retain and acquirenew members.

Executives of the $2.2 billion Northwest Federal Credit Union of Herndon, Va., believe they'vefound a new, cloud-based solution that will keep driving thatall-important differentiator of delivering exceptional service tomembers, including entrepreneurs who cannot afford to lose time,money and opportunity.

The new solution comes from nCino, which was spun off as anseparate software firm in February from Live Oak Bank inWilmington, N.C. Though Live Oak is just five years old, it hasbecome the third-largest originator of Small BusinessAdministration loans. 

Pierre Naudé, nCino CEO, said while Live Oak was exploding withgrowth, problems surfaced with the loan origination system, makingit increasingly difficult for executives to monitor and managetheir key metrics. The bank's loan origination system wasoverwhelmed with paperwork. The heavily regulated SBA loans have asmany as 150 documents that need to be reviewed by a complex web ofpeople in the loan processing system. Live Oak employees had tospend time walking desk-to-desk to monitor the status of loans.

Realizing there had to be a better way, Live Oak executivessearched for a new solution and found force.com, a SalesForce.comworkflow cloud-based platform on which the bank designed a newoperating system with two simple goals: Create heightenedtransparency throughout the entire loan origination landscape andbuild a portfolio management system that would increaseefficiencies throughout the bank.

Through its business relationships with Live Oak, Northwest FCUexecutives got a first look at the solution about two years ago,recently becoming the first credit union in the U.S. to purchasethe nCino's solution.

“I have seen a lot of systems, and I was really impressed withwhat this system can do, particularly on the SBA loan side and withcommercial loans in general,” said Jim Northington, Northwest'schief credit officer. “The way our system was set up at Northwest,the processes were pretty fragmented.”

For example, in addition to using several systems that made loantracking onerous, lenders working in other buildings had to lugtheir paper-stuffed files to another building to meet with otheremployees and manually review what documents were completed, whatdocuments were missing and find out the status of the loans in theprocessing system assembly line.

“Now, it's a matter of sitting in front of your desktop, havingeverything in front of you on the screen, taking minutes as opposedto having people spend a lot of time leaving their desks, carryingfolders and looking for something or someone,” explained NorthwestChief Loan Officer Colleen Daly. “This efficiency has enabled us todo more with less.”

The nCino system is designed to continuously monitor all of theprocess steps and they are moving forward. For example, if aprocess is not completed in the expected time frame, the systemautomatically sends an email alert to the next process step thatthe loan is not being handled in the expected time frame. Thatprompts the loan officer to make a phone or email inquiry to findout what the holdup is without leaving his desk and looking forsomething or someone.

“We saw the nCino solution as a way to pull everything togetherto track loans, have the loans routed to the right people and thenhave an audit trail that enables you to track where those decisionswere made and who made them,” said Northington.

Northwest began using the nCino solution in April, Northwestdoes not have formal metrics to share. Nevertheless, executiveshave noticed a 15% to 20% improvement in process efficiencies.

Based on metrics from Live Oak's experience, nCino's solutionreduced the average time to process a commercial loans (start toclose) from 65 days to 40 days. What drives this reduction, Naudésaid, is nCino's document manager system.

In traditional systems, documents go through a rigorous, serialstep process from one department to another. But nCino took asocial media approach by designing its document manager system as aloan wall, enabling authorized credit union employees to work ontheir own process steps on the same loans simultaneously.

“So anyone from the most senior manager to the most junior clerkin the credit union can actually look at the loan originationprocess and spot outstanding issues,” said Naudé. “That level oftransparency is speeding up the process.”

Other metrics shared by Naudé include:

• 54% decrease in document exceptions,
• 19 % increase in loan volume,
• 22%  increase in staff efficiency and
• 17% reduction in operating costs.

Greg Gibson, Northwest's chief financial and chief operatingofficer, said he was excited that the nCino solution has thepotential do enhance the credit union's market differentiation byletting entrepreneurs track the progress of their loan online.

“This is a big feature for borrowers because it helps themmonitor the loan process, giving them the ability to estimate whentheir loans will be approved,” said Gibson. “Northwest works tocreate a very positive member experience, and this feature is apotential differentiator that will provide value to borrowers.”

The nCino system also enables managers to oversee the workloadby department and employees, how many loans are being processed byevery employee, as well as the history and performance of everyloan and loan referrals.

So impressed with nCino's solution, Northwest is collaboratingwith the software company to develop loan origination system forhome mortgages and consumer loans.

In particular, Gibson has been impressed by nCino's flexiblearchitecture, which allows Northwest to make customized changes inless than a day and at a lower cost. That's in stark contrast toother solution providers, which can take months and charge a highercost to make changes, Gibson said.

“It is completely different from the way software has beencreated and delivered in the past from my personal experience,”Gibson said. “That is a complete game changer.”