Not long ago, building these capabilities required a significant commitment of Internet technology (IT) resources. But now, an online credit approval process can be developed in very little time and with only limited programming support. That has certainly been the experience of the Farm Credit Bank headquartered in Austin, Texas. More importantly, consolidating the acquisition of credit information from multiple bureaus through one online source and linking that data to a scorecard product has paved the way for substantial gains in both productivity and cost savings for the bank.

 

Instantaneous Access to Data
Farm Credit Bank handled the data acquisition component by using MicroBilt's Software Developers Kit (SDK), which provided one component object model (COM) to simplify the communication process and a second COM object to re-configure the data captured from credit bureaus in useable formats. This provided several immediate advantages over the bank's old process in terms of communication expenses, ease of use and the seamless transfer of data from credit bureaus to the bank's software decision tools.

 

For one thing, connecting with more than one credit bureau required duplicating infrastructure and manual tasks. "If a small-time credit grantor wanted to get credit reports quickly, they would have had to make an initial investment of several thousand dollars and then had to pay however many hundreds of dollars every month to maintain their lease lines with each bureau," notes David Fields, senior programming analyst for Farm Credit Bank. This duplication also meant logging on and keying in data for each bureau to get credit reports on a single loan applicant. "We had to request reports by typing information into a separate, stand-alone system that would dial the bureau and then bring back the data in a cryptic format," he adds.

 

Computer Readable Data
The SDK easily overcame any accessibility bottlenecks by providing a single large pipeline and, because it also provided a means to reformat credit bureau data, the analysis process could be accelerated. "People need to be able to use the data that comes off of a credit report in a quick automated fashion. The data that comes across by itself is not good enough to do anything with unless you are able to make your computer interpret it. Paying someone to sit down and go through all the specifications for each bureaus' individual report is a costly, time-consuming task," explains Fields. In the past, the report data would also then have to be manually transferred to the credit analysis system but, using the SDK's formatting capability, Farm Credit Bank was able to present both the credit bureau data in a standardized reporting format for analyst review and along the relevant data elements to their scorecard.

 

"The thing I really like is that before we did not have a single product that would automatically break out the data elements on a credit report. We are redesigning our whole loan system from the ground up, and have made it so we have to enter each customer's information just once. We want to give the loan officer the information they need as quickly as possible so they can decide which path they should follow to determine if the client is credit worthy. What MicroBilt has done is give us a way to read that information into our computer and make automated decisions based upon that information," says Fields. Moreover, implementing these capabilities was not difficult. "Within two days we had plugged in the objects and were good to go," adds Fields. 

   

The Scoring Solution
Helping Farm Credit Bank's loan officers make their credit decisions is CreditDesk, a credit analysis product from Fair, Isaac & Company. One advantage of CreditDesk is that it can be tailored to fit the lending philosophy of the bank, and thereby define the parameters for approving, declining or further reviewing loan applications. As such, it fills the critical function of automating the credit decision process.

 

The customer's application and financial statements set the process in motion. Upon being entered into an online form created in CreditDesk, he information is immediately available for loan office review. At this juncture, credit reports are downloaded or credit bureau data captured for scorecard use depending on the decision rules that apply. With all this data, CreditDesk can then provide automated analysis including financial ratios and scoring tools. Consequently, with loans under $100,000 (for which a scorecard is used) fully automated credit decisions can be realized almost as soon as the online application is complete. That's Internet speed.

 

Infrastructure Considerations
However, initiating the online application process from branch offices presented another set of obstacles. "One of the biggest issues we have on a daily basis is dealing with bandwidth constraints. A lot of our branches have no more than a 64K pipeline to headquarters, and some will have as many 12 or 13 users sharing that pipe. You cannot use a traditional client server setup for something like that because your network traffic is just going to be outrageous," notes Fields.

 

Fields had to look no further than his server software to solve this problem. "From a laymen's standpoint, what we did was implement a very pretty Web browser. It doesn't look like a Web browser, but it's got the inner workings of a Web browser. It transfers data using XML, which is really easy to implement. Your Web server has features built into it allowing for automatic encryption and automatic compression. All you have to do is switch a little setting. So we have encrypted, compressed data going over our lines that did not require any time from our programmers," explains Fields.

 

Farm Credit Bank intends to continue to upgrade their loan process, moving credit applications even closer to customers by putting them on their Web site. And the bank doesn't need to invest in additional technology or heavy programming to accomplish that. "We are doing cutting-edge stuff, but we did not have to learn how to create programs to handle these tasks because they are built into the software we already have," claims Fields. After all, when you are using the right tools for the job, it shouldn't be difficult.