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Fixing your lending model requires the right tool for today

Dec 17, 2020 / Consumer Banking
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The coronavirus has delivered targeted opportunities to address problems in our lending models (some new, some persistent) that should not be ignored.

Regardless of whether problems are poor customer or employee experience, costly inefficiencies, unacceptable credit, regulatory, or reputational risks, how we approach them is driven by the current volumes and the level of pain.

This simple construct leads us to four strategic directives right out of the neighborhood auto shop: Repair, Overhaul, Patch, or Grow/ Redeploy. OK, I realize that last one isn’t really aligned with the auto shop theme, but we’ll get to that later.

Repair (High Volumes/High Pain) – Highest Priority: Have you heard the expression, “Don’t change the tires while driving down the road?” That is exactly the idea here. We cannot stop the process while high volumes flow through the credit process. That would be a disaster for everyone. Rather, we need to surgically repair the most critical problems while minimizing disruption. This requires discipline to identify and prioritize the problems, so we address the worst first and so on down the line. Be careful, be strategic, but be persistent in reaping the biggest benefits now while volumes are high.

Overhaul (Low Volumes/High Pain) – High Priority: This actually may be the most difficult directive to tackle, primarily due to the lack of attention. Since the volumes are low, why bother since we have higher priorities right now. That is why this is the perfect time for a complete overhaul. While the volumes are low, key staff are available to contribute their time, knowledge and skills, while the risk of disruption to your customers and the business are at their lowest. You can really roll up your sleeves, get under the hood and analyze the process, technology/data and organization.

Patch (High Volumes/Low Pain) – Medium Priority: Patching will be a lower priority. You’ve got a high risk/low reward scenario here. High volumes correspond to higher disruption risk, while less pain translates into a lower reward for addressing those issues. Here we should focus on quick wins that can be developed and implemented quickly without impacting the flow of business.

Grow or Redeploy (Low Volumes/Low Pain) – Low Priority: We could have dubbed this one “delay,” as in there’s no need to fix right now, so let’s wait until it becomes an urgent matter.  But we shouldn’t ignore it all together. Depending on the business opportunity, we could invest to grow the business by increasing volumes. If that isn’t practical, assess whether we can redeploy resources to higher volume, higher pain inducing lending channels.

Once we have identified the lending channels to address, their strategic directive and priority, we can apply a simple yet effective, three-step approach to apply the fixes: analyze, develop and deploy. Within each step, the approach can be further broken down into three work streams: process, technology/data and people. The work is laid out in a logical, sequential fashion all coming together for a coordinated implementation.


  • Process: Analyze the current process to identify problem areas through mapping, analysis, interviews and root-cause analysis
  • Technology/data: Analyze technology for inefficiencies and data to identify potential problem credits early
  • People: Analyze staff alignment within the overall lending model. Inform and enlist stakeholders to encourage early buy-in


  • Process: Develop solutions to address each priority process problem area by dealing with their root causes
  • Technology/data: Develop strategies to leverage technology and proactively address potential problem credits
  • People: Develop solutions to optimize the customer and employee experience and effectiveness. Engage stakeholders in solutioning to enhance adoption


  1. Process + Technology/data + People: Deploy chosen solutions with a practical and inclusive implementation approach (e.g., phased or all-at-once), conduct necessary training, go-live, monitor for adoption and success criteria and refine/reinforce as needed.

The shifts created by COVID-19 were dramatic and swift. The financial services industry had to react quickly to be responsive to customers’ needs. But now is not the time to sit back and wait for a return to some level of so-called “normalcy.” Instead, be strategic in taking advantage of the opportunities to fix your lending models.  Doing so will put you on the road to better credit performance for years to come.

Troy Edelen is founder and CEO at Aspiri Consulting.

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