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Old National Bank

A strong credit culture and need to further enhance credit analysis and monitoring

 
Old National Bank has always had a strong credit culture down to the individual loan level, and the pandemic demonstrated the strengths of its approach to underwriting, but also highlighted areas where it should continue to make investment to further improve its credit analysis and monitoring.

Driving data governance and client retention

 
Daryl Moore, Chief Credit Executive and Senior EVP at Old National Bank, explains how the value of ON will support the bank in these ways.
 

Video Source: LendIt Fintech USA, April 27-29

Challenge

 
When the Covid-19 pandemic hit, Old National Bank knew it needed to determine where the highest risk was in its commercial loan portfolio  and how to address it. It soon became clear that its process was too manual and that it needed to get its data organized.

"We can’t rely on the old ways of assessing risk. We need to have the tools to be more responsive to these different types of recessions, which is why OakNorth’s software is going to be a very important product for a lot of banks."

DARYL D. MOORE
SENIOR EXECUTIVE VICE PRESIDENT AND CHIEF CREDIT EXECUTIVE, OLD NATIONAL BANK

Opportunity and outcomes

 
As the team at Old National Bank began to speak to OakNorth, they realized that if they had OakNorth Credit Intelligence in place before the pandemic struck, they could have been much more strategic in addressing the risk in their portfolio

Instead of manually going through the loan book from largest exposure to the smallest and spending a lot of time on credits that did not end up presenting a lot of immediate risk, they could have started with the riskiest and moved through those.

By leveraging ON Scenario Analysis, Old National Bank will be able to make decisions faster, conducting consistent analysis across new credits, running periodic reviews of existing cases, and executing detailed re-underwrites. 

Through analyzing each borrower’s data within its industry and geography, and monitoring it alongside peers using a bottoms-up approach, OakNorth Credit Intelligence will empower Old National Bank to conduct borrower-level stress testing.

Beyond credit analysis, ON Monitoring generates a forward-looking view, inclusive of sub-ratings on liquidity, debt capacity and business profitability, using scenarios that are highly specific to the sector and geography of the borrower. Old National Bank will obtain a granular view of credit and vulnerability across its loan book. Through the continuous monitoring of active credits, Old National Bank’s Relationship Managers will turn monitoring into a real-time process, and build deeper and more meaningful relationships with clients. It will also provide them with more time to originate new deals.