CIO Takeaways from the Paycheck Protection Program
As bank CIOs and IT departments manage the technology underpinnings of operations,
they face the challenge of balancing transformation, data analytics, regulatory compliance, and business agility.
Sometimes the biggest transformative experiences involve how we deal with the uncertainty and spontaneity of unexpected events.
Responding to the healthcare and economic crises of COVID-19, our elected officials passed the Federal Government’s CARES Act and, along with it, the Small Business Administration’s (SBA) Paycheck Protection Program (PPP). As a new and evolving effort, PPP was clearly a transformative experience for smaller community banks, especially those not traditionally active in the small business lending space.
Prior to the PPP, OceanFirst historically did not participate aggressively in the SBA space. Yet, our senior leadership quickly recognized, the positive impact the program could have for our commercial customers, especially in terms of job preservation in the communities we served. The direction came quickly to embrace this solution to assist our customers.
Our recent acquisition of a bank with a small SBA capability allowed us to springboard into the segment rapidly. However, implementation would test how well our internal digital transformation efforts could deliver. Some of the lessons learned from our experience are outlined here.
Go Digital Natively & be Agile
We often hear those words in the technology realm, but rarely take them to heart. Fortunately, we had recently completed an IT organization change that empowered us to deliver more nimble and rapid innovation. We thus embarked on an Agile Scrum change to our development space prior to the PPP effort. Buy, Build, and Integrate your Assets; There is No Single Correct Answer. The PPP intake process for our customers, relationship managers, and regional presidents needed to be digital, direct, and smooth. We used a mix of known technologies, and stood up portals rapidly using SaaS platforms and Cloud Customer Relationship Management (CRM) systems that were familiar to our bankers and commercial customers. We also used open APIs to integrate workflow, document/signature capture systems, and our processing core to quickly onboard and validate what was needed.
Uncertainty is the Name of the Game; Be Nimble
The SBA’s E-Tran portal received heavy usage during PPP Phase 1, but we found submissions during non-traditional business hours worked well. Spinning up multiple Robotic Process Automation (RPA) assets on virtual machines allowed us to book loans, as we were restricted by our bank’s size for direct submission.
The Data is Always there; Turn it into Usable Information & Customer Relationship Opportunities
When the funding dried up in PPP Phase 1, client demand was unabated. We needed to convey that the government was considering another phase with a narrow window, and we worked to get the overflow customers ready. Constant outreach and management through our teams and CRM sentiment capture were vital to keeping customers ‘in the know.’
Customer Sentiment and Reputation are Built or Lost in these Moments
Interest at the bank’s PPP portal kept rising, and Ocean First began hearing from non-customers who were unsatisfied with or rejected by the large banks. We worked with our lenders to turn data into usable relationship opportunities, and engage customers neglected by banks that opted out of SBA PPP or focused only on their top customers.
Rules Change & Competitors Catch Up; So have a Plan B & Plan C
Contingency planning against risk never goes out-of-date. We knew as Phase 2 passed into law, that more small banks and fintechs would quickly jump into the game and the availability of the E-Tran SBA portal for fewer than 5,000 submissions would be a problem based on past congestion from competing banks.
Working with some of our existing cloud & processing partners, we found a method
for digital booking of loans to further accelerate the SBA booking process, regardless of our size. When Phase 2 of PPP opened, E-Tran was over-burdened and our plan B became our plan A– booking all the customers in our backlog, plus new customers that arrived out of frustration with larger institutions.
You’re only as Good as your Last Achievement. Ultimately, OceanFirst built a new customer portal from familiar assets and drove the process forward as policies on PPP continued to evolve. We demonstrated our ability to successfully participate in the Small Business Lending space, should that prove to be an opportunity going forward. Most importantly, we booked 3,001 PPP loans totaling $503 million and saved over 57,000 jobs for employees of our customers. As a community bank, OceanFirst strives to ‘punch above our weight class’ for our customers, stockholders, and communities. We were neither the largest PPP lender in our space nor the smallest. Yet, we delivered a positive experience for our existing and new customers–resulting in a high level of satisfaction. Our bankers also built or enhanced relationships that will be the source of future opportunity.
It ain’t Over till it’s Over
Baseball legend Yogi Berra was prophetic in those words. As we move into forgiveness, changes keep on coming, so the agile methodology sprints help keep the cycle going. There are still uncertainties and there will be more to contend with, but we have come out of the experience battle hardened and eager to improve further. Sometimes unexpected experiences are the best crucible to develop and refine your transformation.