Improving Securities-Based Lending Adoption: Part 1
Adopt a State-of-the-Art Securities-Based Lending Platform to Achieve Results
Is your institution looking for new revenue streams? Have you considered growing revenue by increasing your firm's adoption of securities-based lending (SBL)? SBL is an attractive liquidity option for investors to take advantage of buying opportunities and to finance expenses without having to sell their investments. Over 70% of U.S. households borrow money* but what % of your firms' clients utilize securities-based lines of credit (SBLOC) through your firm?
In other words, why aren't more of your advisors offering SBL as an attractive lending option to a broader range of clients? To take a look at what might be limiting adoption at your institution, analyze your performance metrics, including:
- What % of your clients have SBLOCs? Segment the data into groups and see how many advisors' clients actively use, moderately use, and never use SBL.
- What % of loan applications are abandoned? Look into how long it takes to complete an application and to decision and underwrite a loan. Where do clients drop out in the process?
Supernova observes that it takes an advisor successfully completing three loans to become comfortable with SBL and create a habit. But an advisor will not proactively offer SBL if they don't have visibility and confidence with the loan process as they do not want to subject their clients to a subpar experience.
To gain broader SBL adoption, your firm needs to keep pace with an easy-to-use, integrated, and fully digital SBL solution like Supernova Technology. Supernova's clients experience remarkable results to help grow their SBL business and deliver revenue. Consider:
- Speed to Liquidity: With Supernova's origination platform, loans can be decisioned in minutes or hours, not weeks, with semi-automated processing.** Digital applications can be prepopulated, resulting in increased accuracy and higher client completion rates.
- Ease of Use: Supernova's system is easy to use and intuitive, even for advisors with no lending experience. Clients can go online to request draws on their SBLOC, making utilization convenient and more frequent.
- Transparency: Advisors and clients can view loan details 24/7 through online portals. Portals include color-coded risk ratings to readily track loan health and a collaborative messaging workflow to stay ahead of potential risk trouble.
With a state-of-the-art SBL solution, your advisors will have confidence in the SBL product and process. Having the right SBL solution is part 1 and essential for improving adoption at your firm. Part 2 will review how having a winning go-to-market playbook helps get your firm to even greater adoption levels. You can have a great SBL solution for your advisors and clients, but they need to actively utilize SBL in order to achieve results.
*Summarized from the Federal Reserve Survey of Consumer Finances. https://www.federalreserve.gov/econres/scfindex.htm
**Assumes fully integrated solution.