Chicago-based Akouba creates commercial loan origination software geared for community and regional banks. NorthWestern Financial Review spoke with its co-founder and CEO Chris Rentner about how automation can fit within a community bank’s traditional face-to-face service model.
Q: How did Akouba come about?
Chris Rentner: The team consists of three founders, each of whom grew up with families that owned and managed small businesses. We care about this all the way to our core. Our inspiration for this product was predatory online lenders who are creating great technology but abusing borrowers with high interest rates and misleading fees, and how we couldn’t deal with small and mid-size businesses being treated that way. So we set out to build this platform which would help banks and small businesses, and create an experience that was something better than anyone in banking has ever seen.
Q: Can you provide an example of how origination software integrates into a lender’s workflow?
C.R. Our small business loan origination platform is a complete end-to-end solution that has an omni-channel dynamic portal for the borrower. This means the borrower can stop and start an application with any device at anytime, so they could start an application at midnight and, if they wish, complete it with a banker in a branch the next day. The dynamic portion means the software only asks for what is needed from the borrower based on their situation. For example, an LLC and a sole proprietorship are not the same. Therefore banks are required to collect different information for each of them. Paper applications might say “If you’re an LLC, put xx in this space, if you’re a Sole Proprietor leave it blank.” Akouba doesn’t even bother with this question because we already know what to do if we have your entity type.
There is also a robust portal for the bank that allows the banker to view a dashboard to see where multiple customers are at in the loan process in one view. The banker can view each loan, request additional documents, create a credit memo for credit review meetings, create counter offers, approve the loan and much more.
This creates an entirely new experience for the banks where they can replace some legacy systems or supply data to the critical ones we are not looking to replace. The technology is meant to enhance the relationships banks make already, not to remove them from their current relationship-based selling practices.
Q: What are some of the ways origination software has evolved that might be new to someone who hasn’t looked into it for a while?
C.R. Origination software used to be an installed solution that would get updated every few years at best. This created a huge lack of innovation and demand for improvement. Furthermore, that software was never seen by the borrower. No system on the market up until just a few years ago had a system for the borrower to engage with and see transparency into the process and also had a banker’s portal to move the loan through the steps it needs to take. The other big change is data collection and verification.
Q: A lot of community banks in the Midwest are agriculture focused. Do you see this sort of tech being used in those markets?
C.R. Absolutely. We have Midwestern banks looking at utilizing Akouba now to help with the application process. As we all know farmers are incredibly busy. Digitizing the process would really help reduce the amount of time they have to gather documents and allow them to apply when it is convenient and not in the middle of a work day.
Q: How does your software complement a community bank’s hands-on, face-to-face approach to lending?
C.R. Akouba has done a lot of research in user experience. We want to create a software that is easy to use for everyone regardless of their age. It’s true Millennials are the first to adopt mobile banking and apps but most customers want and expect there to be digital tools available so they can work when it’s convenient to them. Akouba is not replacing the banker. Our digital tools provide transparency into the relationship so both sides can have a better experience. The face-to-face time is still encouraged when using Akouba’s technology because the trusted brand and relationship of the bank is huge. They just need a better solution to gather data and process it.
Q: How do you see origination software evolving in the next five or 10 years?
C.R. Today, banks are looking to find a way to onboard customers online and give them the digital experience they need. The future of the onboarding and origination software space will include machine learning and artificial intelligence to build probability of default models, manage portfolio risk and predict when a customer will need credit before they even ask for it and offer them a tailored solution to specifically meet their needs. Akouba’s vision encompasses all of these elements across multiple product lines.