The new 4 C’s of commercial lending

The new 4 C’s of commercial lending
Last week, I participated in a Finextra webinar on the topic of “Connected Credit and Compliance for Lending Growth” with panelists from ING, Vertus Partners, Misys and Credits Vision.  As I prepared for the webinar, I thought back to my first exposure to commercial lending when I worked for a large regional bank and I recalled the 4C’s of commercial lending from credit training:  character, capacity, capital and collateral.  All of those original 4C’s are still relevant in today’s environment when evaluating borrowers, but when considering the state of the commercial lending business in 2016, we need to think about an entirely new set of 4C’s:
  • Constraints on capital and liquidity
  • Cost of compliance
  • Changing client expectations
  • Competition from new entrants
On a global basis, banks are being forced to restructure their business models, technology platforms, and organizational processes in order to grow their portfolios, remain profitable, and stay in the good graces of their regulators.  All the while, meeting the evolving demands of clients who can view and manage their personal finances on demand, at their convenience, using the device of their choice. Despite these challenges, the panel remains optimistic that banks can and will evolve to grow this critical line of business. finance590x290_0 Where does this optimism comes from? Alternative lenders provide both a threat and an opportunity for banks as they make the difficult decisions on whether and how to serve a particular segment of the commercial lending market. Fintech partners offer more modern solutions than the decades-old clunkers that many banks still use; providing for more efficient and accurate decisioning, enhanced visibility and processing within the bank, and where appropriate, self-service capabilities.  Connectivity with clients and partners will increasingly be the hallmark of a successful commercial lender. For more insights from the panel, please register for the on-demand version of the webinar here: Finextra: Connected Credit and Compliance for Lending Growth.  
Susan Feinberg About Susan Feinberg

Susan Feinberg is a senior analyst with Celent’s Banking practice and is based in the firm's Boston office. Her research focuses on digitizing the corporate client experience with a focus on transaction banking services.

With over 30 years of experience, Susan is a recognized thought leader and trusted advisor in the corporate banking technology space. Before joining Celent, she led Feinberg FS Consulting, a boutique consulting firm providing insights on the challenges facing corporate banks as they respond to a host of disruptive forces.

Previously, Susan was a senior research director in CEB TowerGroup’s Wholesale Banking practice, where she published groundbreaking research on a wide range of topics including mobile and tablet solutions for corporate banking, business-to-bank integration, supply chain finance and the integration of cash and trade, electronic bank account management (eBAM), and commercial loan monitoring technology.

Susan has also held product management and industry marketing executive positions at several leading Fintech providers. She started her career at Bank of Boston, where she spent over a decade in corporate banking in a variety of key positions in domestic and international cash management, commercial lending, and banking operations.

Susan is a frequent speaker at industry conferences including SIBOS, the AFP Annual Conference, and NACHA Payments.

Susan holds a B.A. in Latin America studies from Brandeis University and a Master of Arts in Law and Diplomacy from the Fletcher School of Law and Diplomacy at Tufts University. She is both an Accredited ACH Professional (AAP) and a permanent Certified Cash Manager (CCM).

Comments

  1. Thank you so much for this article. My husband and I have been doign a lot of research on commercial lending and I feel like we keep hitting a wall. I know that we still have a lot more to do but I am becoming more hopeful. We hope to have something ironed out this year. Thanks again!

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