
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%
- Roman Lending Company, a leading financial institution, is committed to providing exceptional loan services to its customers. A core component of this commitment is delivering swift and efficient loan approval processes. However, the company currently faces a significant challenge: the average loan approval time of 3 months, which is substantially longer than the desired Target Turnaround Time (TAT) of 15 business days. This delay is negatively impacting customer satisfaction, leading to a 35% decline in customer satisfaction scores and a potential loss of 20% market share to competitors.
- To address this critical issue and regain its competitive edge, Roman Lending Company has partnered with Q3edge, a process optimization consultancy. This strategic collaboration aims to employ process mining techniques to identify and eliminate bottlenecks within the loan approval process. By optimizing the process and achieving the target TAT, Roman Lending Company expects to significantly enhance customer satisfaction, recapture lost market share, and solidify its position as the premier loan services provider in the banking industry.
- This business case will outline the problem, its impact on the business, and the proposed solution. It will also detail the expected benefits of implementing the process optimization initiatives recommended by Q3edge
What is Critical for Business?
- Customer Satisfaction: Ensuring a swift and hassle-free loan approval process is essential to retaining and attracting customers
- Operational Efficiency: Streamlining internal processes to reduce delays and improve service delivery.
- Regulatory Compliance: Adhering to industry standards and regulations while maintaining efficient operations.

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

Activities with Maximum Rework
- The chart titled “Rework Analysis” visually provides an analysis of the activities with maximum number of rework count. This chart showing the activities rework count across different stages.
- The chart indicates that "Create Application" and "Analyze Offer" have the highest rework counts, both approaching 30. "Approve Offer", "Amend Offer", and "Credit Check" follow closely, all with counts above 20.

Root Cause Analysis of Activities with Maximum Rework

System Partitioned Rework Count by Resource

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