First and foremost, welcome aboard! We are thrilled to have you as a partner, and thank you for the trust. Our job from here is to ensure that you are successful in using the system to meet your goals. We want you to win better deals, build stronger, more profitable relationships with your customers, and build a better brand for your bank.
That process starts with the right implementation. This guide will get you started, but there are more detailed articles in the support center, and our team will be there to walk you through every step and measure success as we go.
For a more in-depth look into the implementation process, visit the Implementation Details and Resources.
A successful implementation of the PrecisionLender sales and negotiation solution has five basic steps:
Each of these steps is detailed below, including a goal and description of each, as well as a list of resources required and deliverables from both the bank and PrecisionLender.
To ensure that both you and PrecisionLender have the right team members involved from the early stages of the project, and to determine the desired outcome of the implementation. What is the target date for going live, and what are the top metrics by which we will determine success?
Organize the Team
The size of your team will depend on how you choose to fill the roles below. Roles do not need to translate to one person, as the ongoing requirements from each person will be minimal. For some, the team is small, and individuals fill multiple roles. For others, the teams are larger, and individuals from across the organization are pulled in to add their expertise for a few small decisions. At the planning stage, all of the team members do not need to be finalized, but it is important that we at least determine the individuals that will “own” and be responsible for the major components.
- Executive Sponsor
- The implementation project’s champion
- Should be involved from the beginning through lender training.
- Will not need to attend every meeting, but it is helpful if they stay involved enough to provide high level strategy guidance and to ensure that necessary resources are allocated for the project to be completed in a timely manner.
- Project Lead
- Manages the overall project, making sure that tasks are completed in time to keep the project on schedule.
- System Administrator (aka "Chief Pricing Officer")
- Should be involved from the beginning stages of the project
- Should be well versed in the business requirements of the system
- After being trained by PrecisionLender, they will do much of the configuration and maintenance of PrecisionLender.
- Lender/Relationship Manager
- Should be one of your top producing lenders
- Acts as the voice of the end user
- Will assist with product setup and assumptions validation
- Credit Expert
- Will assist with pulling the data needed for the Credit Migration Analysis
- Will work with the PrecisionLender Managing Director to finalize the risk grades, collateral assumptions, and default rates based on the migration analysis.
- Finance Expert
- Will assist with the determination of tax rates, funding curves, and capital assumptions.
- Data Expert
- Will assist with creating the data files for the Relationship Awareness module (if licensed).
Choosing the right team is critical. This article has more details and suggestions: Building the Winning Implementation Team
- Implementation Manager
- The Implementation Project Manager
- Involved from the contract signing through go-live/training
- May or may not attend every meeting, but will be the "quarterback" to get the right people from both sides for each meeting
- Ensures the Go-Live date is reached without delays
- Client Success Manager (CSM)
- May be the same person as Implementation Manager
- Main point of contact at PrecisionLender post-training
- Ensures adoption and long-term success post-training
- Coordinates and facilitates discussions on improving success
- Managing Director
- Provides strategic guidance & recommendations for set up and ongoing maintenance
- Assists with target return and Assumptions calibrations during implementation and beyond, as well as help with deal-pricing post go-live
- Leads training sessions
- Relationship Awareness (RA) Manager (if licensed)
- Facilitates timely implementation of Relationship Awareness module
- Works with IT and/or Data Analyst to create a set of custom extracts from core system
- Creates customized set of mapping rules in conjunction with the client to ensure data is properly displayed in RA
- Ensures that client data continues to feed into RA appropriately post implementation
- Integrations (if licensed)
- Assists in integration between PrecisionLender and third party software
- Provides guidance to IT, Administrators and Data Scientists in data management processes via PrecisionLender API
- Collaborates with third party vendors and the client to develop new integration models as needed
- Provide help via email and phone post go-live
- Continually update Knowledge Base on support.precisionlender.com with product release notes and support articles
- Manage requests for client ideas and product enhancements
PrecisionLender is a firm believer in the saying “what gets measured gets managed.” To this end, it is important to set two levels of goals at the early stages of the project.
- Determine a realistic “go-live” date.
- The PrecisionLender team can provide guidance on how long each step usually takes, and will create a detailed project plan, with assigned tasks and due dates, to meet the targeted date.
- Ensure the pricing decisions guided by PrecisionLender are consistent with the your high level strategy.
- Pricing tactics are aligned along a strategy spectrum that includes risk mitigation, growth, and profitability.
- Since these outcomes can at times be at odds with each other, it is important that management communicate the desired outcome to the project team and PrecisionLender so the system can be configured to optimize outcomes.
Configure The System
Set up the basic configuration of PrecisionLender to align with the your work flows, products, and desired outcomes. After PrecisionLender is configured, it will be tested with recent loans to calibrate targets with your goals and current market levels.
With guidance from your PrecisionLender Managing Director, you will create the high level system structure, including region(s), user profiles, and product list. All of these can be adjusted as needed in the future, but a thorough initial setup will ensure that value is maximized at the “go-live” date.
One of the powerful features of PrecisionLender is the ability to track and report pricing opportunities by client, region, state, branch or lender. In addition, using your institution's reporting structure, you can allow different reporting entities to use different products, funding curves, return targets, etc. This provides maximum flexibility to manage your loan and deposit pricing function.
Each region will also need a marginal tax rate, as well as configuration for funding curves, liquidity premiums, and pricing of caps & floors (from the finance expert). The reporting structure can be modified at any time as your organization changes.
More on Regions:
Each active user will be assigned to a Security Profile. Often times, in addition to the lenders and sales team, it’s beneficial and often necessary to give access to credit, finance, loan operations and management personnel. For this reason, the Security Profile functionality is used to determine the level of access that the user has within PrecisionLender. In addition to the Security Profiles, and their associated access levels, you will need to set up overall access restrictions and password protocols.
More on Security Profiles and Access Settings:
- Setting Up Security Profiles And Permissions
- Adding, Editing And Removing Users
- User Access Settings For Password And IP Restrictions
As lenders are working on opportunities, they will have the ability to update the “stage” as it progresses. These stages can be customized to match the your institution's workflow, and will work in tandem with PrecisionLender’s pipeline reporting functionality.
More on Opportunity Stages:
Creating the list of products that are available for use in each region as well as the underlying credit assumptions for each.
PrecisionLender will provide you with a template for collecting the Credit Migration data. This involves the pulling totals for the number of loans in each risk grade at two points in time. PrecisionLender then takes that data, and completes a “RiskCalcs” analysis that will form the basis of all of the credit and capital assumptions for the products. Your team will need to review the suggested assumptions, and make adjustments as necessary to align the assumptions with the your institution's profile.
Commercial and Consumer Loan Products
For each product, the bank (system admin with help from credit and finance experts) will need to enter the credit and capital assumptions for each risk grade, define the overhead costs for the origination and servicing channels, define the collateral types with default LTV and recovery factors, define prepayment options, and define guarantee types with recovery amounts. Much of this is driven by the RiskCalcs analysis and the Credit Migration data.
More on Products:
- Setting Up Products
Assumptions Validation (AV)
Test your configuration of PrecisionLender before the system is rolled out to the rest of the organization.
Users will enter recently closed loans, deposits, and fee accounts into PrecisionLender to test settings and build the data necessary for setting the initial target return. The scope of the AV process will largely depend on the size and complexity of the user base. For smaller institutions, AV is often completed by the system administrator with the help of a handful of end users from the loan department. In larger organizations, it may be necessary to run PrecisionLender with a pilot group for a month or more in order to test all of the various products and specific regional settings. In either case, the AV process has three major objectives:
- Verify that the product list is complete and that the default settings for each individual product are appropriate for the institution. Are there any missing products or any obvious errors in default settings?
- Test a sufficient range of loan structures to validate that the credit, overhead, funding, and capital assumptions are reasonable. Are they directionally consistent, and are the profitability results properly impacted by the different collateral types, risk grades, and guarantees?
- Build a large enough sample of recent accounts so that targets can be set for each product type that will be near current market levels.
Your PrecisionLender implementation team can assist you with creating a testing plan sufficient to meet these objectives. However, the basic steps are as follows:
- Select the team that will enter the recent transactions into PrecisionLender.
- Any members of this testing team that are not yet familiar with PrecisionLender will need a quick training to provide a high level understanding of how to properly enter opportunities. This can be coordinated with your Client Success Manager.
- Determine the total number of opportunities that will need to be entered into PrecisionLender. The general rule is that the more opportunities that can be entered into the system, the more complete the testing will be and the more appropriate the initial targets will be. However, the opportunities need to be recent enough so as to reflect current market conditions. While this definition will vary depending on the specific market and interest rate volatility, opportunities booked within the last quarter are usually sufficient. You should aim for a minimum of three opportunities for each product type, and a representative mix of quality and structures.
- Give the testing team a hard deadline by which to enter the opportunities into PrecisionLender. While the PrecisionLender team is more than happy to help with any questions or issues along the way, it is critical that as much of the entry as possible is handled by your future users. They will better know the specifics of your institution, and will be able to provide valuable feedback on the configuration. While PrecisionLender allows for multiple accounts to be entered on an opportunity, validating the assumptions and setting targets will be much easier if each account is entered as its own unique opportunity.
- Once all of the test opportunities have been entered, they are ready to be reviewed. Have the results reviewed by the appropriate personnel to ensure that the system output meets expectations in terms of how returns are affected by quality, structure, product type, etc. You can also notify your Client Success Manager, and they will ensure that the results are reviewed by a Managing Director. They can also coordinate any calls needed to discuss the results and any adjustments that need to be made.
- After configuration adjustments have been made, all of the test opportunities should be updated to the current pricing date so that the target setting process can begin.
Setting Target Returns
After the products have been created and the baseline assumptions are set, it is time to set target returns. These targets are the mechanism by which the bank communicates to lenders, and thereby the market at large, how aggressively to price specific products. The targets steer the production volume so that it matches the bank’s high level strategy and targeted balance sheet mix.
The process starts by entering recent loans and deposits (samples from each product type) into PrecisionLender, and calculating the actual returns of those structures. In this way, we can determine an approximate “market level” of return for each product. The bank (executive sponsor and system admin) can then determine, based on the bank’s objectives, how to price products relative to that market level.
These targets are intended to be a starting point only, as they are not a “set it and forget it” part of the system. Instead, these targets will be adjusted on a regular basis as both the market and the bank’s strategies evolve.
More on Setting Targets:
Relationship Awareness Setup
To pull relationship data from your core system(s) so that it can be used to measure current profitability as well as gauge the impact of any new opportunities to existing customers.
During the data integration phase, a PrecisionLender Relationship Awareness Specialist will work with your IT/Data expert to create a query to pull the necessary data from the bank’s core system(s). This information includes specific fields for loans, deposits, other fee based products, and relationships. Once the necessary data is pulled, PrecisionLender will map it to the proper users and products, and then do a test of the automated process in our testing environment. After testing, PrecisionLender will assist with the installation of PLI.exe, which is the upload tool that completes the data upload into PrecisionLender’s production environment.
Engage The Users
- Create a sound process with clearly defined expectations for users.
- Engage the end users and get them excited about using PrecisionLender to improve performance.
After the system setup is complete, targets have been set, and data has been integrated, PrecisionLender will provide you with a guide for creating the right process. It is vital that management clearly communicates to the lenders how the system is expected to be used. Specifically, the following will need to be determined:
- Which loans require pricing through PrecisionLender?
- How are loans updated through their stages?
- What is the process for approval of pricing exceptions?
- Where do users go with support and strategy questions?
When those questions have been answered, PrecisionLender will create a training outline for you to approve. The training of users (called Strategy Sessions) is completed by a PrecisionLender Managing Director on site. The sessions last 2 to 3 hours, and we are happy to visit multiple sites in order to get all users on board. You should plan on having both the system administrator and the executive sponsor attend all of the training sessions to ensure that any process or institution specific questions can be answered, and to communicate to lenders why and how PrecisionLender is to be used.
Measure & Improve
After training is complete and users are logging in, PrecisionLender will actively engage with you on a quarterly basis. The purpose of these quarterly meetings is to ensure that current progress/success of the system is measured, and specific steps can be taken to continually improve your results in line with the high level strategy.
Every quarter, PrecisionLender will schedule a Customer Success Review (CSR) with the your team members that are handling the ongoing administration of PrecisionLender. This typically includes the system administrator, the executive sponsor, and any other loan or credit staff pertinent to the specific discussion. PrecisionLender will provide an update on the latest success metrics, as well as discuss any relevant changes or feature additions to the system. Your staff should bring any issues or questions that need to be discussed, as these calls are your resource for making sure that the system continues to work as intended, and that you are achieving success with PrecisionLender as envisioned when the contract was signed.