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Managing Relationships with nCino Pricing and Profitability

By JP Owens 01.13.22
Reading time: 5 minutes

When it comes to hitting profitability targets, it’s important to understand that relationship profitability is just as important as loan profitability. You might issue an unprofitable loan to keep a profitable relationship going. But in order to make the right decisions for each customer, you need a holistic view of an entire relationship.

With nCino’s new Pricing and Profitability solution, relationship managers can see at-a-glance all the necessary information they need to negotiate and win deals, in the same platform where the back office sets, manages, and administers pricing policy. It’s an embedded experience where you can drive your pricing strategy and negotiation process, and it’s all done by analyzing data on the loan origination platform your employees are already using. 

This democratizes the consumption of data and drives much greater intelligence, empowering the end user as they price new deals and bring in new revenue, and making it easier for teams to understand if they are meeting the goals they’ve set.

3 ways nCino Pricing and Profitability streamlines relationship management

Let’s say you’re a relationship manager meeting with a business owner about a future loan. Before your conversation, you want to see a 360-degree view of the customer, including the products and services they already have as well as their profitability information. You want to understand what that relationship is today, which will give you a rough idea of where the new loan will fall from a pricing standpoint. Here’s where nCino Pricing and Profitability comes into play.  

1. Create individual lending scenarios

“What kind of rate can you offer?” It’s one of the first questions a relationship manager will be asked, and nCino’s Pricing and Profitability makes it easy to answer. It allows you to create as many new pricing scenarios as you need, and clone existing scenarios to quickly see how a few changes impact profitability. 

You can give each scenario a name and add comments about what they are individually accomplishing. The scenario autofills with any details that have already been captured on a particular loan — like risk rate, amount requested, and term — and any changes you make here will flow elsewhere in the system if this becomes your selected scenario. 

One of the system’s most impressive features is nCino IQ Rate Optimization. It automatically calculates profitability to find the point where the loan is profitable or unprofitable, adds a threshold so that you can hit profitability hurdles, and then calculates what rate will achieve that level of profitability. It displays profitability metrics like RAROC and net income, and will let you know if the numbers aren’t compliant with your institution’s hurdle rate policies. The system also captures others details around the profitability, and clicking the information box reveals a full income and expense breakdown for that loan. 

2. Uncover how loan profitability impacts relationship profitability

But again, loan profitability isn’t the end all, be all. Relationship profitability is your north star, and nCino Pricing and Profitability shows you the pro forma impact of what that loan does to the relationship. Overpricing can cost you business while underpricing can lower your profitability, so you need to find the lending scenario that hits that sweet spot for both you and the customer.

Maybe your client is especially rate sensitive but isn’t as sensitive to a loan origination fee; they’re willing to pay more upfront to get a better rate for the long haul. You can edit that fee at the scenario level, and once you’ve negotiated and decided on a scenario, it all is saved to the loan record. 

In many cases, your customer will already have a rate from a competitor when they engage with you. Simply turn off Rate Optimization and input the competitor’s rate to see if you can match their pricing. If it dips under your hurdle rate threshold, you’ll get a warning that you are out of policy. You can do all this on a phone or tablet while you’re in the field, and this real-time feedback helps you better negotiate with the customer. 

3. Make your data work for you

If you’re using Excel or another third-party platform for data management, you might have some difficulty transferring information between systems unless you have a complex custom integration. nCino’s tools eliminate that rekeying of data. They’ve embedded their entire Pricing and Profitability solution within their loan origination system, so you can access your custom scenarios at any point of the lending process. 

After a loan is booked, you can return to these custom scenarios for renewals and modifications. These loans are automatically refreshed and recalculated on a monthly basis to see what the loan and relationship profitability are like as the customer goes through their lending lifecycle. 

Having all of your data in one place significantly improves portfolio monitoring and reporting. Both the inputs and outputs of the pricing scenarios and models are saved in nCino, and can be reported on using reports and dashboards. Not only can you report on loan operations and price lines, but you can report on profitability.

You can gain a full view of the least profitable and most profitable relationships across your institution, and see average profitability by industry to determine which spaces you should prioritize in your larger strategic vision. By looking at average profitability by relationship manager, you can uncover coaching opportunities if someone is not negotiating their deals well. If you have an especially strong performer, you might choose to have them lead the next team meeting and share tips and tricks with the rest of the team. 

All of this enables you to seamlessly take portfolio analytics, set strategy, and immediately put it in the hands of lenders to execute and see if it improves profitability. 

Enrich your lending relationships with Silverline and nCino

As a certified Salesforce and nCino partner, Silverline has proven expertise delivering implementations and customized solutions for banking and lending organizations. Over the years, Silverline has built and distributed industry accelerators within the Financial Services ecosystem to solve industry challenges with best practice solutions delivered and customized for banks. 

Silverline has unparalleled customer satisfaction, has delivered over 1,200 deployments, and leverages highly certified industry-focused resources that work with you to ensure measurable success. 

Looking for more information about how nCino Pricing and Profitability can benefit your company? Look no further. 

Ready to see real results? We can help.

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