The following is Part 2 of a 3 Part Series to help wealth management institutions build a business case to use Supernova TechnologyTM as their securities-based lending solution. Click here to download the full article.
When you partner with Supernova TechnologyTM (Supernova), the industry’s leading fully digital, end-to-end securities-based lending (SBL) technology solution provider, you can grow SBL revenue through increased adoption AND gain operational efficiencies. But how can you make financial projections as part of building a business case for using Supernova as your 3rd party technology solution? Below are steps to help you project your potential revenue growth and operational efficiency gains.
QUANTIFY YOUR REVENUE GROWTH PROJECTIONS1
You’ll need to gather key data points to quantify your revenue growth projections. Those include:
- What is the size of your current SBL book?
- How many private bankers / advisors have access to your SBL platform and how many actively do SBLs at present?
- What is your application abandonment rate?
- What are your average SBL line-of-credit utilization rate and line size?
- What is your current (AUM) assets under management?
Use your data as a baseline when building the revenue side of your business case. To forecast what kind of adoption growth is possible, know that Supernova’s clients’ approved credit lines have increased 112% year-to-date (December 18, 2019 – October 23, 2020). Our clients have seen their application pull through rates increase by as much as 30%. With an automated, self-service portal and easy access to same-day draws, Supernova’s clients have also achieved SBL utilization rates up to 40%. Your business case should include a likely, worst, and best-case scenario to give your projections credibility.
With an automated, self-service portal and easy access to same-day draws, Supernova’s clients have also achieved SBL utilization rates up to 40%.
It is more specific to each institution to calculate AUM growth. With an easy-to-use SBL platform, adoption will increase as private bankers / advisors taste success using SBLs to strengthen relationships with their clients. Clients do not have to sell securities to meet their liquidity needs and often consolidate assets—leading to AUM growth.
IDENTIFY METRICS AND FORECAST OPERATIONAL EFFICIENCIES
Your business case should also include operational efficiency gains for origination and collateral monitoring. For example:
- In your business case forecast for efficiency gains that could reduce the staff needed to underwrite loans. Supernova’s technology automates straight-forward processing allowing staff to work on the truly complicated loans and exceptions. Our clients benefit from an origination process that takes minutes2 not weeks with an average cost less than $50/line.
- Risk teams can monitor more loans with Supernova’s easy-to-use yet powerful reporting tools with all necessary data consolidated in one place and advanced predictive and simulation capabilities. With automation, collateral monitoring requires significantly less time and effort with an average cost of $15/line.
Work through different operational efficiency scenarios and their impacts to include in your business case. Don’t forget to include any cost saving from retiring your current SBL systems.
By identifying your biggest challenges, you are on your way to achieving your goal—to get buy-in to partner with Supernova as your SBL technology solution.
Do not hesitate to reach out to us at info@supernovacompanies.com if you would like to speak with us about revenue growth, operational efficiencies, and cost savings that could be gained with Supernova as your 3rd party technology provider or request demo today.
Click here to download the full article and read the Five Steps to Build a Business Case to Use Supernova TechnologyTM as Your Securities-Based Lending Solution.
1Figures provided by Supernova are estimates based on historical data and there is no assurance that projected results will be attained.
It is not intended that the Contents contain forward-looking statements. If statements contained anywhere in the Contents, including statements regarding events and financial trends that may affect future operating results, financial position and cash flows, may be found to constitute forward-looking statements within the meaning of the United States federal or other securities laws, all such statements are based on assumptions and estimates by Supernova Lending, LLC and are subject to risks and uncertainties. You can identify these forward-looking statements by the use of words like "strategy," "expects," "plans," "believes," "will,” "estimates," "intends," "projects," "goals," "targets" and other words of similar meaning. You can also identify them by the fact that they do not relate strictly to historical or current facts.
2A fully integrated solution with advisor firms and custodians allows for real-time inquiry and pull of client and collateral account data. This makes the application and loan agreement process run faster and more seamlessly than lower levels of integration. Fully integrated solutions to activate collateral account lockdown and e-signature of the collateral account control agreement streamlines the underwriting process for decisioning lines of credit and setting approved lines live.