Codat and nCino partner to help banks underwrite small business loans better and faster

By Edlyn Cardoza

Codat, the universal API for small business data, announced a partnership with nCino, the worldwide leader in cloud banking, to automate and accelerate banks’ ability to underwrite small business loans around the world.

“Our platform makes it easier for credit analysts to gain a clear picture of credit risk,” said Thomas Byrne, General Manager, EMEA at nCino. “Financial institutions have the opportunity to deliver a better experience to their customers by automating the flow and exchange of data throughout the lending lifecycle. We’re proud to be partnered with Codat to further automate processes that enable financial institutions to significantly improve efficiency, accuracy, and create cost savings whilst being able to respond to actual customer need in real time.”

nCino’s seamless solution significantly reduces the time it takes banks to transfer information from a borrower’s financial statements into the bank’s financial analysis program (a process known as “spreading financials”). nCino’s Bank Operating System is used by more than 1,750 financial institutions worldwide. Partnering with Codat will bring this same efficiency to underwriting loans for the banks nCino supports, making it faster and easier for small businesses worldwide to access credit.

“The process of underwriting small businesses remains incredibly labor-intensive for most institutions,” said Codat’s CEO Pete Lord. “A large number of the banks we speak to are still having to request financial data from customers on a quarterly basis and manually input that data into their loan management system – a process that is prone to error and a pain for the customer. The power of this partnership is that we’ve built our automated data collection and categorisation capabilities directly into the nCino platform, which is already used by over a thousand institutions worldwide. They can get started now with very little lift to implement.”

One of the first financial institutions to adopt the new integration, Recognise Bank, eliminated significant data entry requirements.

“As a bank focused on SMEs, using technology from best-in-class providers that offer us scalability and flexibility is a key to our success. We looked at other solutions for streamlining the collection of data from customers, but Codat was the clear choice because it offers the ability to automatically categorise accounts and validate accuracy across multiple data sources. Automating our internal underwriting processes means we can provide our customers with a quicker, more efficient and frictionless service. The integration between nCino and Codat further supports our mission to make small businesses’ lives easier,” said Mo Fadaei, Director, Banking Platforms and Partnerships, Recognise Bank.

Ninety-seven% of financial institutions have digital transformation plans, but just 30% are working to implement their strategy, according to a 2021 survey by BDO. This is because most banks are held back by the practical challenges and expenses of retrofitting existing systems to incorporate new tools while meeting complex compliance requirements.

This partnership is just the latest in Codat’s suite of solutions to streamline and automate the credit process. Earlier this year, Codat launched Assess, enabling smarter credit decisions on small to medium-sized businesses with real-time customer data via a single API after the company’s lender clients universally requested a product that would support faster business decisions without increasing risk.