Your commercial and small business bankers love Vertical IQ for call preparation, but the value of Industry Intelligence reaches far beyond these groups. In this seven-part blog series, we will discuss how Industry Intelligence can be utilized by lines of business across your bank enterprise.
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Part 1 of 7: Industry Intelligence Offers a Wealth of Treasury Management InsightPart 2 of 7: Industry Intelligence Puts Card Services in Charge
Joe Friday from Dragnet was known for wanting “just the facts, ma’am.” This catchphrase also sums up the role of your bank’s credit underwriting team. When considering a commercial loan, it’s their job to uncover and mitigate industry-specific risk factors and gain industry knowledge surrounding loan concentrations. But how can they possibly have a handle on every industry your bank works with?
Here’s a helpful clue: Industry Intelligence makes credit underwriters’ detective work quick while providing the comprehensive insights needed to make informed lending decisions. In fact, the Industry Intelligence found on Vertical IQ provides value across your entire bank enterprise.
Follow the clues with Industry Intelligence
Industry Intelligence has the unbiased, in-depth analysis credit underwriters are searching for, but since it is compiled in one location, it saves the team time and effort — and that saves the bank money. No more sifting through resources that may or may not be reliable; no more worrying about whether you have the most current data. Industry Intelligence is a compilation of all the most recent, relevant, reliable evidence in one location.
It’s really no mystery: Industry Intelligence offers the very insights needed to put the pieces together during the credit analysis and decision-making process. It helps credit underwriters:
- Find information on working capital as a repayment source — Since cash is likely the client’s repayment source, get up-to-date information on trends that could disrupt cash flow. Review the “Working Capital” chapter of the Industry Profile for even more detailed information, as well as cash management challenges.
- Understand exactly what the bank is financing — Get familiar with typical start-up costs plus the equipment and technology needed to outfit a business within the client’s industry. Since you don’t want to amortize a loan longer than the lifespan of the collateral, the “Capital Financing” chapter also provides a cost range and useful life for equipment being purchased.
- Analyze the inherent risks, including exogenous risk factors — It’s no surprise that the “Credit Underwriting and Risks” chapter, including our proprietary and unbiased Industry Risk Rating, is especially important for credit underwriters. It explains current risks that have been identified at the industry level as well as at the company level: economic drivers, regulatory changes, pending legislation, changes in the competitive landscape, or staffing shortages, for instance. Key metrics on the potential business failure or merger rate as compared to the national average also are valuable when weighing loan concentrations, and the Financial Comparison Toolkit lets you compare key financial metrics for your client to industry averages. The “Industry Forecast” chapter also shows if a client is operating within an industry that is projected to grow or contract.
- Compare a borrower’s financials to their industry — The “Financial Benchmarks” chapter allows credit underwriters to compare a specific company’s performance to that of their industry peers. The data can be filtered by sales size bands — small, medium, or large business — so you can compare apples to apples.
- Look at the local economy — A review of the “Local Economies” section enables credit underwriters to assess the health of a business’s local market, looking at what industries are growing or contracting, where jobs are being created or lost, and how unemployment rates compare to the overall economy. It also displays data on the health of the local real estate market, providing statistics around vacancy rates, housing prices, and building permits.
- Learn about COVID impacts and other current events — It’s important for underwriters to get a feel for how an industry is weathering the pandemic. The “Coronavirus Update” chapter unravels impacts to supply chains, hiring, safety regulations, and more. The “News” chapter keeps you apprised of salient current events.
The key evidence credit underwriting needs
Credit underwriters are the gumshoes of your bank, pulling together the evidence needed to make an objective case for a client loan. The Industry Intelligence on Vertical IQ gives underwriters provable analytics, saves time, and ensures they have the most up-to-date insights and unbiased data for their decision-making processes … ”Just the facts, ma’am.”
Want to learn more about how your credit underwriting team and other lines of business across your bank enterprise can use Vertical IQ’s Industry Intelligence to save time and win more deals? Contact Vertical IQ today for a free demo!
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