Gulf Coast Bank and Trust, a New Orleans-based bank with $1.7 billion in assets, is using automation technology to speed up loan approval times. The bank is tapping cloud banking vendor nCino to automatically pull information from tax returns when underwriting commercial loans.

According to Jason Shields, vice president and loan operations manager at Gulf Coast, reducing human involvement saves Gulf Coast time and money, and yields a better experience for clients. In turn, underwriters can focus on complex cases, such as high-dollar commercial deals.

“Underwriters are the most expensive part of a commercial loan origination process,” Shields said. “Having them spend less time doing simple things like punching in numbers from a tax return has been really good for us.” 

Through nCino’s technology, which is called nIQ, loan applicants can send tax returns as PDFs or pictures. It allows Gulf Coast to automatically extract relevant information, such as cash flow and revenue, to underwrite commercial loans. 

Gulf Coast identifies potential customers through CRM platform Salesforce, and customers submit documentation through a secure portal. Underwriters can extract all relevant customer qualification information for a loan with one click. The efficiency of the new workflow has cut processing time in half, according to the bank. Shields estimates small loans, or loans of $250,000 or less, now take about two hours compared to four from start to finish. Larger loans, or loans of up to about $5 million, now take half a workday compared to a full workday. Loan officers, in turn, don’t have to worry about a bottleneck at the underwriting stage.

While the automation technology usually extracts customer information from documents successfully, it occasionally prompts humans to verify if the tasks have been done correctly. According to Shields, the tool requires human verification in less than 10% of cases.

See also: TD Bank Updates Its Commercial Lending Division with NCino Partnership

Gulf Coast tested the system for about six months prior to launching it one month ago. During that time, Shields estimates the bank extracted data from roughly 2,500 tax returns. The tool is only available for commercial loans for now, but Gulf Coast is considering how it can be applied to retail customer use cases.

Despite the upgrade in technology, banks like Gulf Coast still face pressure from non-bank lenders like Kabbage and BlueVine, which announced a $102.5 million Series F funding round Tuesday. Both companies offer small business loans that can be approved in minutes. Juozas Kaziukėnas, CEO of e-commerce research firm Marketplace Pulse, recently told Bank Innovation these lenders are often in a better position to serve small businesses, especially small-scale sellers that would be ignored by a large bank. “[Alternative lenders] have better data than a bank would have and can offer loans to sellers who would have no access to funding,” he said.

Bank Innovation Ignite, which will take place March 2-3 in Seattle, explores emerging technologies in banking. Attendees will gain a firsthand look at new products and services from both legacy and upstart perspectives. Request your invitation.