An Analysis of the Turn-around Time in Processing of Simple and Complex Auto Loans of BANK XYZ
A Paper in Management Statistics
Diana Grace Taruc
Flor Melodie Suyat
Prof. Marian Angeli Reyes
TABLE OF CONTENTS
Survey Results-Data Presentation
A bank, being in the business of lending, evaluates its performance in the market based on feedback and evaluation. Bank XYZ, in particular, monitors its Turnaround Time (TAT) or the amount of time within which a specific process is completed. The Auto Loans Department, in particular, monitors its TAT through the AIMS which is a system devised to track the movement of an account from the time the application comes in to the time it is submitted for credit evaluation until a credit decision is made (approval or disapproval).
This study is an analysis of the turn-around time of Bank XYZ in processing auto loan accounts which may be classified either into simple or complex accounts. Simple accounts are those which can be decided upon based on the available data or information submitted by the client and on simple credit verification such as employee verification over the phone and personal data confirmation from the client over the phone. Complex accounts on the other hand are those that will need further credit investigation such as field investigation where in a field credit investigator conducts field verification of business, employer, or residence. Standard TAT for simple accounts is set by the bank at 3 hours while TAT for complex accounts is at 7 hours.
It is the purpose of this study to analyze the January data on turnaround time of Bank XYZ in relation to other factors such as the credit analysts’ productivity, total number of approved and disapproved accounts, total number of simple and complex accounts, and credit decisions for accounts which can be either approved or disapproved. Information derived from above data would be useful for Bank XYZ in that it can help the management come up with decisions affecting the efficiency of credit analysts whose role in credit investigation is very crucial. Given the competition in the market particularly in the business of Auto Loans, turnaround time is an important consideration that can help the bank get a bigger market share.
This study was conducted for the purpose of evaluating the performance and productivity of Bank XYZ’s credit analysts in processing auto loans. In accordance with this we aim to prove if the bank’s promise of driving his/her own car one day after the loan application is possible. This study also includes the evaluation of each credit analyst’s turnaround time in processing complex and simple auto loans that will result either in approval or disapproval. In line with the outcome of each application, analysis was conducted for the volume of approved and disapproved applications and the factors that lead in such result.
The results of the credit analysts’ performance evaluation will be useful for Human Resources department in giving recommendation for promotions, salary appraisal or incentives. They will gain knowledge in the performance and productivity of each analyst and this will help them decide whether or not they should provide further training for the team. The productivity of the analyst will determine if he/she is contributing enough for the team or if he/she is the detrimental reason for the low turnaround time in processing auto loans application. With the outcome of analyzing the factors that lead for an application to be approved or not will be significant for the management in deciding if their criteria for approval is too lenient or not. Having said that, the management team can reassess their basis for loan approval and brainstorm for further...
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