Leveraging Automation to Deliver 'Rescue Loans' During Pandemic

Automation tool processes PPP loans from government during Covid-19 pandemic

OVERVIEW

A Texas-based bank enlisted Saxony Partners to build an automation tool allowing critical small business loans from the government’s Paycheck Protection Program to be processed during the coronavirus pandemic.

When the coronavirus pandemic caused a global economic shutdown in early 2020, the government quickly enlisted the help of the Small Business Administration and the U.S. Congress to deliver the Paycheck Protection Program, aimed at shoring up small businesses nationwide and protecting American jobs.

Our client, a mid-size regional bank based in Texas, typically processed about 1,500 loans per month. Within days of the PPP going live, they were looking at more than 4,600 new applications.

Time was of the essence. One, the American economy and individual livelihoods were on the line. Two, the federal government mandated that each of these loans had to be processed and closed in less than two weeks.

With no automated process in place for aggregating loan data and checking to ensure it is complete and accurate, the volume of loans in the queue threatened to overwhelm the bank’s staff. Saxony was enlisted to build a tool that would aggregate and automated their loan process.

THE PROJECT

There was no time to waste. Immediately, Saxony deployed a team onsite to map out the workflow involved in processing, fulfilling, and closing a loan application. The goal was to quickly identify bottlenecks and develop a solution to avoid them.

Typically, a project of this nature takes weeks or months – but this one was going to have to be completed in hours or days. Saxony’s team put in long hours, late nights, and weekends to deliver the solution, which focused on solving two critical challenges.

First, siloed data. Data streamed into the loan process workflow from three non-integrated sources. There was a system that processed loan origination data, entered by the bankers themselves. There was a system connected to the Small Business Administration’s database, providing back-and-forth communication with the government. And, finally, there was the core banking system, whereupon the payouts from the loans would be deposited into individual business accounts.

Second, there was no automated way of verifying the data included within the loan application. Account numbers needed to be cross-referenced, financial documentation and tax forms needed to be assessed, and loan amounts needed to be verified in accordance with the PPP’s rules.

Saxony’s team quickly built a workflow tool that integrated data from the three disparate systems, identified missing or inaccurate data within the applications, and included built-in data management and reporting components.

PROJECT INSIGHTS

Out of the thousands of loan applications the bank processed during those hectic days, roughly half had some data discrepancy or missing information. This would have required hundreds and hundreds of staff hours to uncover, but instead took mere moments for the automation tool to identify.

THE RESULTS

Here’s the big takeaway: In days, the bank was able to process more than three times its typical monthly loan volume. More than $730 million was put into the hands of small business owners, directly saving countless jobs, health insurance policies, and livelihoods. At a time when their customers needed them the most, this bank was able to serve as their trusted lifeline.

Here are some bottom-line impacts:

  • Time required to close a loan went from days to hours

  • Countless staff hours and bandwidth was reassigned to more important tasks

  • The tool, which was originally intended to be temporary until the pandemic passed, can easily be tweaked and made permanent

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