The new solution comes from nCino, which was spun off as an separate software firm in February from Live Oak Bank in Wilmington, N.C. Though Live Oak is just five years old, it has become the third-largest originator of Small Business Administration loans. 

Pierre Naudé, nCino CEO, said while Live Oak was exploding with growth, problems surfaced with the loan origination system, making it increasingly difficult for executives to monitor and manage their key metrics. The bank's loan origination system was overwhelmed with paperwork. The heavily regulated SBA loans have as many as 150 documents that need to be reviewed by a complex web of people in the loan processing system. Live Oak employees had to spend time walking desk-to-desk to monitor the status of loans.

Realizing there had to be a better way, Live Oak executives searched for a new solution and found force.com, a SalesForce.com workflow cloud-based platform on which the bank designed a new operating system with two simple goals: Create heightened transparency throughout the entire loan origination landscape and build a portfolio management system that would increase efficiencies throughout the bank.

Through its business relationships with Live Oak, Northwest FCU executives got a first look at the solution about two years ago, recently becoming the first credit union in the U.S. to purchase the nCino's solution.

“I have seen a lot of systems, and I was really impressed with what this system can do, particularly on the SBA loan side and with commercial loans in general,” said Jim Northington, Northwest's chief credit officer. “The way our system was set up at Northwest, the processes were pretty fragmented.”

For example, in addition to using several systems that made loan tracking onerous, lenders working in other buildings had to lug their paper-stuffed files to another building to meet with other employees and manually review what documents were completed, what documents were missing and find out the status of the loans in the processing system assembly line.

“Now, it's a matter of sitting in front of your desktop, having everything in front of you on the screen, taking minutes as opposed to having people spend a lot of time leaving their desks, carrying folders and looking for something or someone,” explained Northwest Chief Loan Officer Colleen Daly. “This efficiency has enabled us to do more with less.”

The nCino system is designed to continuously monitor all of the process steps and they are moving forward. For example, if a process is not completed in the expected time frame, the system automatically sends an email alert to the next process step that the loan is not being handled in the expected time frame. That prompts the loan officer to make a phone or email inquiry to find out what the holdup is without leaving his desk and looking for something or someone.

“We saw the nCino solution as a way to pull everything together to track loans, have the loans routed to the right people and then have an audit trail that enables you to track where those decisions were made and who made them,” said Northington.

Northwest began using the nCino solution in April, Northwest does not have formal metrics to share. Nevertheless, executives have noticed a 15% to 20% improvement in process efficiencies.

Based on metrics from Live Oak's experience, nCino's solution reduced the average time to process a commercial loans (start to close) from 65 days to 40 days. What drives this reduction, Naudé said, is nCino's document manager system.

In traditional systems, documents go through a rigorous, serial step process from one department to another. But nCino took a social media approach by designing its document manager system as a loan wall, enabling authorized credit union employees to work on their own process steps on the same loans simultaneously.

“So anyone from the most senior manager to the most junior clerk in the credit union can actually look at the loan origination process and spot outstanding issues,” said Naudé. “That level of transparency is speeding up the process.”

Other metrics shared by Naudé include:

• 54% decrease in document exceptions,
• 19 % increase in loan volume,
• 22%  increase in staff efficiency and
• 17% reduction in operating costs.

Greg Gibson, Northwest's chief financial and chief operating officer, said he was excited that the nCino solution has the potential do enhance the credit union's market differentiation by letting entrepreneurs track the progress of their loan online.

“This is a big feature for borrowers because it helps them monitor the loan process, giving them the ability to estimate when their loans will be approved,” said Gibson. “Northwest works to create a very positive member experience, and this feature is a potential differentiator that will provide value to borrowers.”

The nCino system also enables managers to oversee the workload by department and employees, how many loans are being processed by every employee, as well as the history and performance of every loan and loan referrals.

So impressed with nCino's solution, Northwest is collaborating with the software company to develop loan origination system for home mortgages and consumer loans.

In particular, Gibson has been impressed by nCino's flexible architecture, which allows Northwest to make customized changes in less than a day and at a lower cost. That's in stark contrast to other solution providers, which can take months and charge a higher cost to make changes, Gibson said.

“It is completely different from the way software has been created and delivered in the past from my personal experience,” Gibson said. “That is a complete game changer.”