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B Y CHRI S PA NE B I A N CO, S P E C I AL TO B A N K I N G N E W YOR K
FinQuant, Not Fintech
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Why Bankers Healthcare Group Prioritizes Data For a Better Bank Loan Offering
n the three months since the COVID-19 outbreak erupted in the United States, the lending market has seen a significant amount of disruption. At a time when banks would have been focused on loan volume and building their income streams, many shifted their attention to the Paycheck Protection Program (PPP) to support local business owners. Paired with the recent news that mortgage rates have reached a record low, many banks are considering new ways to build and diversify their loan portfolio. Historically, community banks would consider alternative lenders or Fintechs competition, but now they’re looking at these partnerships as a way to strengthen their bottom line. While partnering with nontraditional lenders has its benefits, it’s important to note that not all lenders who claim the “fintech” title have the same impact financially. These companies can originate loans with ease, but their true differentiator—and the return on investment for your bank—is in their historical data.
LOANS BACKED BY DATA AND INSIGHTS
One well-established alternative lender, Bankers Healthcare Group (BHG), sets itself apart from fintechs by carving its own niche as a financial quantitative service company, or FinQuant for short. The company has been originating loans for community banks for nearly two decades, targeting licensed healthcare practitioners and highly-skilled professionals—some of the highest-earning borrowers with top-tier credit scores in the country. BHG also built proprietary quantitative analysis models that leverage 19 years’ worth of its own historical borrower data, to uncover variables that dictate the risk associated with each borrower. Utilizing some of the brightest minds in analytics from top universities and companies, as well as 30 data vendors, BHG has gained unmatched insight into its borrower characteristics and performance by industry and can quickly determine the performance potential and the price risk. Not only does this data help inform future decisionmaking into who BHG lends to, it’s also leveraged
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by BHG’s full-service, in-house marketing agency to execute highly targeted campaigns to millions of professionals every day. Even within these industries, BHG is extremely selective: the company targets the top 20% of the strongest credit quality healthcare and other highly skilled professionals. This attention to detail originating on the front-side of their business gives BHG an unbelievable advantage to ensure they’re only lending to top-rated borrowers, which has resulted in over $6 billion in financial solutions to date. Now more than ever, community banks are in a unique position to diversify their commercial loan portfolio and strengthen their bottom line. By choosing an established partner like Bankers Healthcare Group and joining the BHG Bank Network, they have the peace of mind and can quickly put a growth plan into action.
FINQUANT-DRIVEN RESULTS
Today, BHG works with more than 15,000 of these coveted borrowers each month, with a record $429 million funded in Q1 of 2020. That trend continues into Q2, with phenomenal loan volume sold through the BHG Loan Hub, a state-of-the-art loan delivery platform for community banks. This secure, online system allows for daily sale and delivery of medical and professional loans while helping BHG service the growing loan demand from community banks. The platform includes various methods whereby a single loan or portfolio of loans can be purchased. It has been a highly effective distribution channel where a bank can approve the loan program and purchase loans according to their underwriting standards the very next day. New loans are posted each day and, as with all BHG loans, a consistent, complete credit file is available for review prior to purchase. Across the country, a network of more than 1,100 community banks get access to high-quality medical and professional loans—earning a solid 3 to 6.5% return—and over the course of 19 years, no bank has ever taken a loss on the BHG Core Loan portfolio.
