Sterling Bank Deploys Workflow-Based Loan Solution

With an eye toward doubling its $2.5 billion in assets over the next few years, Sterling Bank has launched a project to automate loan processing, integrating process automation and document imaging across its 37 branches.

The Houston-based bank has installed content management software from Ceyoniq, Herndon, Va. Using Ceyoniq Process Manager, Sterling will establish detailed procedures to ensure that loan documents are efficiently routed.

Other components include Ceyoniq's DocuTREEV document imaging solution, and software for enterprise report management. Initial rollout took place in November.

Sterling looked carefully before choosing Ceyoniq.

"We know technology will play a key role in enabling us to reach our goal," said Glenn Rust, executive vice president of operations and technology at Sterling Bank.

It's important to be aware of all the different modules that are available in any system, he added, and to make sure they're all necessary.

Avoiding unnecessary upfront expenditures is just one piece of the puzzle, though. Especially in these times, keeping a close eye on running expenses and financial projections is also important.

"If you think that a document imaging system is going to make all of your paper go away in six months, you're wrong," Rust said. "It's going to take several years before the paper flow starts to really stop. If you're predicting incorrectly, your expenses are going to look higher later, because they really haven't gone away yet."

Sterling expects to save well over 200 staff hours monthly by doing away with copying paper documents for distribution to remote offices, retrieving and refiling stored paper or microfilmed documents, and researching staff and customer queries.

Loan documents from all sites will be scanned and indexed at the bank's central loan operations center in Houston, enabling local offices to retrieve needed records electronically over the bank's wide area network instead of requesting information from the central facility.

Sterling's internal staff will support the system, which runs on Hewlett-Packard servers connected to IBM PCs.

Initially, the system will facilitate the processing of more than 1,750 (new and renewal) installment, commercial and real estate loans every month, comprising tens of thousands of document pages. The volume is expected to increase significantly as Sterling Bank grows.

Complex workflow rules were applied to the loan preparation process to improve loan accuracy and processing efficiency.

"By implementing process automation and eliminating many of the manual steps, Ceyoniq's solution should enable us to substantially increase the number of loans handled per person, thereby supporting our strategic growth plan," Rust said. By capturing the majority of loan application data electronically, the new system also minimizes the risk of data entry errors.

Still, with each of its 37 branches referring to the forms and steps in the process by different names, Sterling has had its hands full implementing a standardized system.

"You'd be surprised how many different ways there are to physically file a document, or there are six or seven versions of the same form that all look different," Rust said.

"Talking the whole bank into using one form, calling it the same thing, and making sure all your collateral files and credit card files are all filed the same way is a challenge," he noted.

Another problem has been credit file size. "We know that we have clean credit files, but when you're getting ready to scan them, you have to start making decisions about what really needs to be included," Rust said. "It's not hard, it's just time-consuming."

Credit files tend to grow over time, he explained. "If you've got a good customer, they may have done a lot of business with you. At one time it was valid having all that information in there; now maybe it's not."

The rollout will continue one branch at a time, picking up speed as the bank moves along.

"We have to train all the staff, and make sure all the workflow is flowing correctly. We have to watch these conversions much more closely at first, until we get three or four under our belt," Rust said. "Then we'll start converting at a faster rate."

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INSTITUTION:

Sterling Bank

ASSETS:

$2.5 billion

BUSINESS CHALLENGE:

Automate loan processing across 37 branches.

SOLUTION:

Ceyoniq

KEY QUOTE:

"Ceyoniq's solution should enable us to substantially increase the number of loans handled per person."

- Glenn Rust,

executive vice president, operations and technology