So here it is! The moment you all have been waiting for–the top ten hot topics of 2009 (in no particular order of importance).
1. Portfolio Risk Management – You should really focus on this topic in 2009. With many institutions already streamlining the origination process, portfolio management is the logical next step. While the foundation is based in credit quality, portfolio management is not just for the credit side.
2. Review of Data (aka “Getting Behind the Numbers”) – We are not talking about scorecard validation; that’s another subject. This is more general. Traditional commercial lending rarely maintains a sophisticated database on its clients. Even when it does, traditional commercial lending rarely analyzes the data.
3. Lowering Costs of Origination – Always a shoe-in for a goal in any year! But how does an institution make meaningful and marked improvements in reducing its costs of origination?
4. Scorecard Validation – Getting more specific with the review of data. Discuss the basic components of the validation process and what your institution can do to best prepare itself for analyzing the results of a validation. Whether it be an interim validation or a full-sized one, put together the right steps to ensure your institution derives the maximum benefit from its scorecard.
5. Turnaround Times (Response to Client) –Rebuild it. Make the origination process better, stronger and faster. No; we aren’t talking about bionics here — nor how you can manipulate the metrics to report a faster turnaround time. We are talking about what you can do from a loan applicant perspective to improve turnaround time.
6. Training – Where are all the training programs? Send in all the training programs! Worry, because they are not here. (Replace training programs with clowns and we might have an oldies song.) Can’t find the right people with the right talent in the marketplace?
7. Application Volume/Marketing/Relationship Management – You can design and execute the most efficient origination and portfolio management processes. But, without addressing client and application volume, what good are they?
8. Pricing/Yield on Portfolio – “We compete on service, not price.” We’ve heard this over and over again. In reality, the sales side always resorts to price as the final differentiator. Utilizing standardization and consistency can streamline your process and drive improved yields on your portfolio.
9. Management Metrics – How do I know that I am going in the right direction? Strategize, implement, execute, measure and repeat. Learn how to set your targets to provide meaningful bottom line results.
10. Operational Risk Management – Different from credit risk, operational risk and its management, operational risk management deals with what an institution should do to make sure it is not open to operational risk in the portfolio. Items totally in the control of the institution, if not executed properly, can cause significant loss.
Well, that’s it. We encourage your feedback on this list. Let us know which of these ten topics is a priority for your institution and what specific areas in each topic you would like to see addressed.