Hackathon ARM Rework

So What's the PROBLEM??

* The current rework process takes too long

* Packages are "locked" in the approval queue

* Packages are being conditionally approved, but the

changes are often not being made

* There is no easy way to verify rework changes

PROOF OF THE PROBLEM

Based on ACE statistics and survey:

* Average Frost days: 22.49 days

* Current rework process requires ARMs

to email the authorized approver to

send the package back for rework

* ARMs are only making ALL the requested

conditional changes 26% of the time

Customer Experience

* What's affected? Our customer experience.

* How? By having to do numerous amendments.

* Why? Some loans are being approved conditionally.

• Conditional changes are sometimes not being made by ARMs. These omissions are not discovered until renewal.
• At that point, the borrower must sign an amendment.

This detracts from the total customer experience in addition to putting the bank in an undue position of excess risk in the meantime.

Survey Results

Sales Managers, Regional Presidents, Credit Officers, AA, ARMs and RMs

Survey Results

(AA and ARM)

* 80% said they had submitted a package in which the parameters changed immediately after submitting for approval

* Submitters estimate that 20% of the deals they work on need to be changed while in the “submitted for approval” stage

* 88% call or email the approver to request the RDP be sent back for rework so they can make the necessary changes

* When asked to make conditional changes to a package immediately after approval, submitters only go back and make the changes 26% of the time

Survey Results

(Sales Managers, Regional Presidents, Credit Officers)

* 40% of approvers verify all rework changes by memory

* 30% verify that ONLY major rework changes have been made

* 89% of approvers send conditional changes to submitters after approving a package

* 80% said they would prefer a Rework Summary over the current process

proposed Solution

* ARM Rework Option

* Rework Summary Document

ARM Initiated Rework

In times when material information affecting the RDP is introduced after the package has been submitted for approval (and is in the approval queue), such as a change in guarantor structure or collateral, the ARM would have the ability to initiate a rework and pull the package from the "submitted for approval" queue.

After making the change:

* If significant, the RDP would return to the beginning of the approval process with an attached summary of changes (planned "Rework Summary" mirroring a Modification Summary).

* If immaterial, the package would go back into the approval queue of which it was pulled out with a summary of changes.

Proposed Work Flow

Immaterial Rework

Significant Rework

proposed Solution

* ARM Rework Option

* Rework Summary Document

For Example...

Scenario: We are competing with another bank and have a package pending approval.

Request: Borrower requests an increase to the loan amount.

What is important? Speed of approval!

Our Competitive Advantage: Ability to be nimble, and modify the loan amount quickly!

Submitter

Approver

Movement Chart

Benefits - ARM Rework

* Will allow the ARMs and AAs to pull a package back into Active Rework

status to make changes.

* Provides an efficient alternative to current rework process.

* Record of changes will be saved in the Movement Chart.

* For implementation, we will modify existing ACE architecture to

generate a Rework Summary similar to the MOD summary in order to

show a record of actual changes.

we welcome any questions

ACE OF SPADES