First State Bank of the Southeast estimates savings of $50,000 per year in employee hours from a new automation in its consumer and commercial lending process.

The automation will also reduce loan turnaround time by 20%, according to Chief Credit Officer Penny Sharp, who heads the loan process at the Middlesboro, Ky., bank.

The $350 million bank is working with Jack Henry’s digital commercial loans system to build out the automation. Customization and integration are expected to be complete by May, Sharp said, allowing the bank to completely automate with one system both its consumer and commercial loan originations, decisioning and portfolio-management workflows. Mortgages are managed in a separate system.

Jack Henry provides several lending tools and services to banks and credit unions, including a core system, a “digital bank in a box” and, in partnership with Plaid, an API-based data-sharing platform for banks. It also offers a Paycheck Protection Program (PPP) loan platform, based on its digital commercial loan system, which helped banks process more than 70,000 loans with a total of $6.5 billion in requests during the first round.

Currently, First State Bank of the Southeast uses a manual system marked by Excel spreadsheets and two legacy solutions, one for document preparation and the other for financial spreading. By eliminating those two tools, plus Excel spreadsheets and calculating the time it took employees to navigate these diverse systems, Sharp expects the new system to pay for itself in two to three months.

“We had to go through the cost analysis to see, really, could it pay for itself if we did this?” Sharp said. “We were able to really justify almost an immediate payoff.”

The new solution also is integrated with the bank’s core system, provided by FIS, which will allow for faster loan approval and more insight into the loan process, Sharp said.

“It takes the actual application for a loan, which feeds into the collateral processing and the loan request, and actually feeds into creating your loan documents,” Sharp said, adding that the solution is “very customizable” according to the bank’s needs.

The whole of First State Bank of the Southeast conducted an efficiency study in conjunction with the build. The results allowed the bank to overhaul inefficient processes before committing the processes to automation, which Sharp said would prevent the bank from needing to rework code. Now, employees work with processes that are more specialized, rather than having everyone working on all aspects of the loan.

With the new system, Sharp said she can access more data about the progress of loans, allowing her to create further efficiencies and, potentially, a competitive advantage, with the ability to “really track from start to finish how long a loan takes.”

Bank Automation Ignite, on April 13-14, is the event for inspiring automation initiatives and investment in financial services. At the virtual event, financial services professionals can discover new use cases and technologies that are accelerating automation in banking. Learn more and register at www.BankAutomationIgnite.com.