Alex,

This is a great article and very accurate summation of commercial relationship lending. As a commercial lender at a community bank, I can attest to the true madness of this profession at times. One never seems to attain mastery, but rather always seems to come up just shy (or become a consultant). Frustratingly, it seems the more one refines his craft in this business, the more difficult it becomes. Your comments were absolutely accurate and some of the best I've read lately. In my career at three separate community banks with distinct credit cultures, the complexities in relationship lending as you've described have always monopolized the show. No deal is the same and the true short- and long-term costs frequently outweigh the ever-shrinking margins, while relegating roles of lenders to loss-leaders for attracting new deposits and other business banking services. I've personally found it difficult to convey these realities to anyone other than my fellow bankers, but thanks to you I'll now have something to share with folks when asked why I'm so busy all the time.

Perhaps many long-time commercial relationship lenders become so jaded and cynical due to many years of misaligned efficiency/sales/credit pressures driving them mad. CreditQuest sounds great to me, but your challenge I'm afraid, will be overcoming natural skepticism on behalf of overworked lenders who will see any relief as yet another opportunity to inherit more unrealistic expectations and misaligned goals. Fortunately, Harland is selling to bosses and not lenders! The good news is decision-makers now hopefully understand the importance of long-term focuses in this new post-crisis ERM era where equivalent benefits lie in the mitigation of previously unaddressed long-term operational risks such as low employee moral, thus helping reduce turnover, errors, absenteeism, or worse. By viewing improvements in processes to be worthwhile long-term investments in the franchise rather...

…than short-term drags on earnings, opportunities exist to increase enterprise market value well beyond the alternative short-term benefits. In light of this, CreditQuest should continue gaining momentum and doing very well in the market

I'm currently writing a research paper on the related topic of common trade-offs (stresses created and common breaking points) when RM individual portfolios become too large. At the same time I'm trying to develop a rule-of-thumb method to help banks determine appropriate portfolio sizes for commercial relationship lenders. As you've written, among the tools recommended for addressing the resulting stresses is technology like CreditQuest.

Not being familiar with your product, I'm wondering if you could possibly share any supporting internal or external research to help quantify its rough benefits for use in my assumptions. For that matter, any information used in Harland’s analyses related to average industry costs involved with processing commercial relationship transactions for ascertaining potential cost savings would be greatly appreciated. Finally, would it be possible to obtain the names of a couple banks using it in the Northwest region, or would that be considered proprietary and confidential? Any help would be greatly appreciated and thanks again for the great article.

Mike Tsoukalas
Everett, WA