Case Study CREDIT RISK

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Case
Study
Independent Bank Corporation Eliminates Data Silos and
Streamlines Commercial Lending Processes with CreditQuest
®
“Using the report and analysis features in
CreditQuest along with hard work from our
staff, we were able to see the issues and
Independent Bank Corporation (IBC) is an Ionia,
ultimately reduce our exceptions by 50
Michigan-based bank holding company with total assets
of over $3 billion. Founded as First National Bank of
percent. As an organization, we changed our
Ionia in 1864, Independent Bank now operates more
incentives to refocus on exceptions—and
than 100 offices across Michigan’s Lower Peninsula,
providing retail and commercial banking, mortgage
their prevention.”
lending, investments and title insurance. In 2007, IBC
consolidated four banks under its umbrella, which required
Matt Norton
a melding of culture and operational methodology.
Business Analyst
Independent Bank
CreditQuest Eliminates Data Silos
Although the consolidation was coming together, the
bank’s credit origination process could not have been
“We are actually one of the first banks to sign with
spread further apart. “We had disparate systems and
CreditQuest in November of 2005.” Graves said. “A
were working with silos of data, which means we were
number of systems are now consolidated into CreditQuest,
wasting a lot of time, keystrokes and efficiency,
” said
to centralize operations. CreditQuest is the wheel that
Pete Graves, senior vice president and CIO of Independent
keeps things going; the various systems are the spokes
Bank Corporation. “We wanted to create a full-circle
of the wheel,
” Graves said. “We currently have our core,
lending model to streamline the process—one that went
which is our main repository of data, all of our financial
from loan underwriting and approval into document
spreads and loan proposals, LaserPro
documents and
®
preparation and then uploaded everything back to the core.
”
credit bureau information centralized. We are working
on adding risk rating automation and enterprise content
IBC chose Harland Financial Solutions’ CreditQuest, a
management with imaging. By positioning our workflow
complete, end-to-end commercial credit management
this way, we reduce our number of errors and increase
system. The solution brings origination, analysis,
efficiencies.”
underwriting, documentation and executive reporting
together for a unified, relationship-centric view of the
customer’s financial data and supporting documents.

Case Study
Report and Analysis Features
should see them,
” explained Norton. “That means there’s
Reduce Exceptions
one comprehensive reporting source, instead of five
CreditQuest is being rolled out in phases and IBC is already
different people doing five different things with five
seeing the benefits from this more streamlined approach.
different outcomes.
”
“One area where we are really seeing benefits is
Pete Graves concurs. “Before, we had snapshots instead
exceptions. These were not being tracked efficiently
of comprehensive reports. We would have to piece those
before, so we really didn’t know how bad they were. Using
different snapshots together for anything resembling a
the report and analysis features in CreditQuest along with
trend analysis,” he said. “CreditQuest’s Portfolio Manager
hard work from our staff, we were able to see the issues
takes all these snapshots and builds the trend, which
and ultimately reduce our exceptions by 50 percent. As
should save us a lot of time—and also provide us with
an organization, we changed our incentives to refocus
more accurate data.”
on exceptions—and their prevention,” said Matt Norton,
business analyst for Independent Bank.
Pipeline management is also important to Independent
Bank. “It’s a challenge to be able to extract how much
The bank is also pleased with CreditQuest’s document
business is actually out there, what your potential is,”
management and tickler functionality. “We can track
Graves said. “With pipeline management reporting, we
financial statements, like quarterly tax information, and
will be able to see the activity for that region and create
use the system to ‘mind the lender,
’ sending reminder
an effective strategy.
”
e-mails out before a document comes past due,
”
Norton explained.
Twelve years ago, Pete Graves envisioned the commercial
lending information “circle of life”, utilizing a comprehensive
CreditQuest will Improve Risk Rating Process
commercial loan process without the data silos. Today,
The integrated rating process for loans will also prove
with Harland Financial Solutions’ CreditQuest, that
beneficial. “We’re using the individual risk-rated transactions
vision is becoming reality.
to enhance our methodology. Instead of using our standard
“The platform enables everyone to evaluate and manage
12-point rating system, we will be able to break down
risk, because everyone can tie into it, and the system ties
the components so it’s easier to assess risk and identify
back into the core,” Graves said. “It’s a powerful way to
why the decision was made—such as cash flow, or
reduce keystrokes and risk while streamlining workflows.
loan-to-value—We can then better weight the various
Ultimately, we will be able to do even more with fewer
areas and, in effect, more accurately weight the risk,
”
people. There are a lot of variables in commercial lending.
Graves said.
Building a centralized workflow with one place to contain
Portfolio Manager Streamlines
all of that data is tremendous. That’s what CreditQuest
Reporting Process
helps us do.
”
IBC will soon begin implementation of CreditQuest’s
Portfolio Manager module. “Portfolio Manager will allow
us to organize data so that we can slice and dice the
inherent risk. We will use this information to create
comprehensive reports and provide access to those who