BANKS MOVING TO LQAS REVIEW AUTOMATION
We briefly mentioned the loan review capabilities in LQAS earlier. The next leap forward has occurred. A new client is considering elimination of third party loan review and rely on LQAS. This is a tipping point for this technology. Additional banks that are looking at LQAS for a portfolio monitoring solution are planning to follow suit.
Elimination of third party reviews will drastically cut costs. One client reduced portfolio review time dramatically. Based on their size it would take me three to four weeks to review their portfolio at my best. LQAS made it’s pass through all loans in two seconds. This was not a sample. It was the entire bank. The plan is for lender A to review lender B’s portfolio after LQAS determines grades and writeups and vice versa. The output from our AI system is mainly a major time saver. Experienced lenders can review the system’s output and edit both grades and writeups.
REVIEW EXPENSES PRACTICALLY GONE
The reduction of review expenses alone can offset the cost of the system. Additional benefits mentioned in earlier articles include exam prep time in hours. Board reporting prep time in hours. Committee workups and relationship exception reports for the borrower in seconds. This also eliminates all reviewer related travel expenses.
TIME IS MONEY
Our test relationship would take about three hours to review. Proofreading the AI’s output would take about five minutes.
We solved all other aspects of a review years ago. We have been assisting internal loan review in banks ranging from under two billion to over fifty billion. The new banks selecting LQAS to eliminate external review are much smaller. One hundred million to three hundred million in assets, of course any client we have can implement this.
Our current client base ranges from seventy million to over five hundred billion.
Demonstration of the review capabilities would take around thirty minutes. Reviewing the entire system which would include all areas that feed the model lasts an hour.