It's the proverbial low-hanging fruit. In our recent survey, bank clients didn't frame their use of commercial evaluations in precisely those terms when describing the bevy of benefits produced. But they might have.
As reported in Boxwood's annual bank client survey this past January, the top three rewards of commercial evaluation use included: Savings on borrower fees (75% of respondents cited it); savings on internal appraisal costs (47%); and faster turn times (44%).
Also, in what amounts to a positive feedback loop, the realization of these benefits by bank credit and appraisal officers was a driving force behind the intention of a majority to further increase usage this year.
But perhaps the key takeaway – and most conclusive endorsement of commercial evaluations – was the belief by 60% of bankers that make extensive use of evals that the tool has improved their institution's competitiveness in winning or retaining business.
In an era of increasing competition from nonbank lenders as well as diminishing profit margins, maximizing use of commercial evaluations on lower-risk collateral loans appears to be a relatively easy, obvious and surefire way to reduce lending costs and stay in the game.
See the survey Infographic here.
You can also register and download the full narrative report.