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Industry

Understanding Industry Trends and Issues

At Third Pillar we pride ourselves on knowing the business as well as the technology. Current initiatives in the Leasing and Lending Industry include compliance and regulation activities which are impacting everyday business within financial entities and institutions. Our continual conversations with clients and researching the latest industry topics, we have solutions which can effectively address these industry changes and allow clients to concentrate on their lending and leasing business while seamlessly integrating these solutions. Currently we are addressing the following topics:


Basel II Capital Requirements

LoanPath helps you Basel II Capital Requirements by offering built-in capabilities to require credit information that can support the various Basel calculations, from the less data-intensive Basel approaches to the Advanced Internal Ratings Based approach.

With LoanPath you can handle credit scoring requirements two ways:

  • Use scoring model within our rules engine
  • Interface the required data and interfacing with a 3rd party engine via a secure data connection.
Either way, Third Pillar can use the credit scoring decisions to drive transactions to separate workflows that correspond with a client's credit policy.


Operating Risk and Reduce Capital Allocation

Manage Operating Risk and Reduce Capital Allocation allocation rules within LoanPath, enabling a regulated financial services entity to adequately measure and manage Operational Risk and reduce their capital allocation, resulting in significant cost savings.

  • Operational Risk (OR), "the risk of direct or indirect loss resulting from inadequate or failed internal processes, people and systems, or from external events," is a new metric used in the calculation of economic capital under the new Basel capital accord.
  • Under the Internal Ratings Based (IRB) approach to measuring Operating Risk, all processes must be tracked any break down in process must be recorded in a loss database with its severity and frequency.
LoanPath's validation, workflow, versioning and audit trail feature eliminates the errors inherent in a manual system and creates an end-to-end electronic process integrated with a loss event database and a process management module.

LoanPath supports operational risk monitoring in your lending process and can feed a loss event databases. Defining a loss event within LoanPath is as easy as dragging a monitor point into the process designer. Any break in the process is automatically recorded, and optionally forwarded to the risk group.

In addition, simplify enterprise asset valuation and Loss Given Default (LGD) calculations with EAVE. Our Enterprise Asset Value Evaluation (EAVE) product collects detailed information on the assets that are the collateral/residuals for your commercial leases and loans, providing the data necessary for Loss Given Default calculations at any time during the loan/lease lifecycle.

EAVE gathers data on an asset including unlimited, dynamically defined attributes of the asset. EAVE also supports the creation of formulas for valuating the assets or asset classes based on user-defined criteria including ballpark quotes, booking quotes, revaluation of the assets in question based on market conditions. This level of detail and flexibility in associating formulas with assets and attributes makes it easy to reevaluate a set of collateral for a portfolio of loans, essentially doing a mark-to-market based on market conditions.

If a manufacturer comes out with a new model in an asset class, like a server or copier, a new formula to reflect that influence on expected values for existing collateral is easy to create in a web-based interface. The resulting data can be fed to meet the Expected Loss calculations required in the Basel Capital guidelines.

EAVE answers the regulators questions on how the residual exposure was calculated by systematically gathering and storing data on financed assets and using that data to make residual calculations more accurate over time.

Six Sigma Requirements

From dashboards to span monitoring, LoanPath can enable any Six Sigma environment Third Pillar Systems is committed to designing and implementing quality systems, and embeds Six Sigma methods in our product lines and our service offerings. The process management underpinnings in LoanPath ensure consistency across the enterprise, feeding executive dashboards and monitoring span across not only a transaction, but also an entire portfolio.

The average commercial lending transaction involves over twenty-five documents, many with multiple iterations. Combine this with over a dozen participants, often in different locations, and the opportunity for defects and bottlenecks - as well as lost time and lost revenue - is evident.

Our customers report that one of the most important drivers of their customers' satisfaction is meeting expected dates for loan and lease transactions. LoanPath helps you to accomplish the following:

  • Measure and manage performance
  • Set realistic expectations for turnaround time with your clients
  • Refine and improve your process over time
Our built-in workflow allows measurement of cycle times across the entire process (wingspan) or between specific tasks or workflow statuses. Further, these measurements can be easily changed overtime as workflows change and your origination process evolves.

SOX Requirements

LoanPath enables internal controls and regulatory support because it has a well-defined credit process and logs all transactions within the system, exceptions to the defined credit process can be measured and understood - by corporate management and regulators.

All the transaction information in LoanPath is retained in an Oracle database that provides information for credit and auditor analyses of credit decisions and results. Further, the audit function can look at specific transactions AND the workflows for those transactions to verify that credit policies are adhered to. An audit of a portfolio can be enabled through assess to the system and the proper entitlements so audits can be ongoing and even outsourced to other locations. 		 

Solutions for the Lending and Leasing Industry

Third Pillar understands the unique information management requirements of the commercial leasing and lending industries.

From measuring workflows and work queues to the management of enterprise asset and residual data, Third Pillar has a module that can help you easily access the information that lets you manage your business.




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