T2 titles, a provider of digital transformation solutions for banking and credit, and Boston Focus Group (BCG) today announced the launch of YieldBuilder, a solution that addresses efficient loan pricing for commercial banks.
The companies cite research from S&P Global Market Intelligence which indicates that net interest margins recently fell nearly 14% for most credit institutions, and according to the Federal Deposit Insurance Corporation (FDIC), which in second place quarter of 2021, saw its net interest margins drop 31 basis points from a year ago to 2.5 percent, their lowest on record. The largest financial institutions in the United States were responsible for the overall decline in net interest income.
âEfficient pricing of commercial loans is a major industry issue and it’s an issue we’ve worked to mitigate over the years with Q2’s PrecisionLender solution,â said Tim shanahan, Vice President of Client Strategy and Partnerships, Q2 PrecisionLender. âWe are delighted to partner with BCG to offer YieldBuilder, a new comprehensive solution that will help commercial bankers better solve the problem of loan pricing and provide better service to their clients. This partnership represents the best of both worlds – the best digital banking technology and industry leading expertise – to help commercial banks meet their toughest challenge. “
YieldBuilder enables commercial banks to deploy value-based pricing, through a platform that helps relationship managers establish effective pricing. The companies said the solution can be used for all commercial loan products in all segments and has several unique propositions, starting with improving yields without impacting the success rate.
Using artificial intelligence and machine learning, YieldBuilder analyzes proprietary banking data to estimate a customer’s lifetime value. Other promised benefits are good market benchmarks on credit spreads and easy integration with commercial bank technology systems.
“Although record levels of deposits have drawn banks’ attention to the increase in lending volume, we firmly believe that this should not come at the cost of lower margin spreads,” said Sumitra karthikeyan, Partner and Managing Director of BCG, which leads the North American practice of marketing, sales and pricing for financial institutions. âIn our work to help banks develop new pricing strategies in commercial lending, lasting results are achieved when these strategies are built on a robust platform like the Q2 PrecisionLender solution. We are excited to bring YieldBuilder to market with them.
Although they are currently only available in North America, companies plan to introduce YieldBuilder worldwide, they said.