Loan Approval Process

Roman lending Company is a well-established banking institution dedicated to offering a diverse range of financial services, with a strong emphasis on loan products. The company prides itself on its customer centric approach, striving to deliver quick and efficient financial solutions to meet the diverse needs of its clientele.
With a robust portfolio and a commitment to excellence, Roman Lending Company is poised to revolutionize the loan services market

Client

Roman Lending Company

Services

Process Mining 

Year

2020

Share
Business Case

Roman Lending Partners with Q3edge to Reduce Loan Approval Time by 85% & Boost Customer Satisfaction by 35%

What is Critical for Business?

Problem Statement

Roman Lending Company's loan approval process is currently taking an average of 3 months, surpassing the established Target Turnaround Time (TAT) of 15 business days. This delay results in a 35% decrease in customer satisfaction scores and a potential loss of 20% in market share to competitors. To address this issue, ABC Company has engaged Q3edge, a consulting firm specializing in process optimization, to conduct process mining. This will help identify and rectify bottlenecks, thereby bringing the loan approval process within the desired TAT and enhancing overall business performance

Opportunity Statement

Roman Lending Company has the opportunity to enhance its loan approval process by reducing the average approval time from 3 months to the Target Turnaround Time (TAT) of 15 business days. By achieving this, the company can increase customer satisfaction scores by 35%, capture an additional 20% of the market share, and establish itself as the number one provider of loan services in the banking sector. This improvement will be facilitated by engaging Q3edge for process mining to identify and eliminate inefficiencies in the current system.

What we think our process looks like

How it actually looks like

Analysis of Maximum Time Consuming Activities

The chart titled "Top 5 Max Time Consuming Activities" provides an analysis of the average duration and cycle time for the five activities that consume the most time. The chart distinguishes between the overall activity duration and the activity cycle time, offering a clear visual comparison.

Root Cause Analysis of Time-Consuming Activities

In our root cause analysis of the maximum time-consuming activities, we identified the “Implement Payment Schedule” process as a significant bottleneck. This process affects 72% of the cases, with 23 symptomatic and 9 non-symptomatic cases out of a total of 32. Addressing this bottleneck is essential for improving our loan approval timelines and operational efficiency

Resource Activity Analysis

The chart titled "Resource Activity Analysis" visually presents the distribution of activities performed by various resources across different roles. It is specifically focused on analyzing how activities are distributed among different resource roles, providing insights into role-specific workloads and performance.

Resource Efficiency Analysis

Key Performance Indicators for Loan Process Analysis

Key Performance Indicators (KPIs) are crucial metrics used to evaluate the efficiency and effectiveness of processes. This summary outlines the significance of various KPIs such as the number of cases, number of activities per case, case duration, fitness value, rework count, activity cycle time, and activity duration.

Activities with Maximum Rework

Root Cause Analysis of Activities with Maximum Rework

In our root cause analysis of activities with the highest number of rework instances, we identified three primary issues: “Non-conformant” and “Non-compliant” cases, each affecting 69% of the cases (31 symptomatic and 14 nonsymptomatic out of 45), and the “Implement Payment Schedule” process, affecting 64% of the cases (23 symptomatic and 13 non-symptomatic out of 36). Addressing these issues is crucial for reducing rework and enhancing operational efficiency

System Partitioned Rework Count by Resource

This chart displays “Resource-Specific Rework Counts” partitioned by system across various resources. The systems represented are SMS Loan Management (red), Salesforce (purple), and EasyLodge (blue). The y-axis shows rework counts up to 40, while the x-axis lists different resources, likely employees or departments.

Loan Process Compliance Analysis Dashboard

Out of 50 cases, 46 are nonconformant and only 4 are conformant, resulting in an 8% conformance rate. The case conformance per month chart shows a declining trend in case volume from January to December 2020, with the highest number of cases in January. The conformance rate per month graph indicates a relatively stable but low conformance rate throughout the year, with slight fluctuations.

Conformance Issues Analysis

This section delves deeper into conformance issues. There are 46 non-conformant cases with 24 individual conformance issues. Non-conformant cases have a longer throughput time (9.83 months vs. 8.16 months) and fewer activities per case (12 vs. 13.96). The main conformance issue types are invalid start activity, invalid end activity, and unexpected consecutive activities.

Conclusion

By successfully identifying and overcoming bottlenecks in the loan approval process with the help of Q3edge’s process mining expertise and consulting, Roman Lending Company has achieved significant improvements in operational performance and customer satisfaction. The targeted intervention has brought the loan approval time down to the desired Target Turnaround Time (TAT) of 15 business days. This achievement underscores the company’s commitment to delivering efficient and customer-centric financial solutions