The path to Paycheck Protection Program (PPP) automation has varied among financial institutions, with some automating the entire loan process and others focusing on automating certain parts of the process.

PPP Automation: The use of robotic process automation (RPA), data management platforms, lending platforms and other technology tools to automate all or part of the federal PPP loan process.

1. Break down the PPP loan process

Generally, banks divide PPP into three automatable steps. Lenders best able to get loans forgiven and serve their business borrowers have automated the gathering of information, the calculations required, and the transmission of data to the SBA, according to a “how-to” guide for the second PPP round by software provider Boss Insights.

Minneapolis, Minn.-based Sunrise Banks, with $1.2 billion in assets, partnered with paper automation platform Anvil to automate its entire PPP process. Anvil CEO Mang-Git Ng said the bank broke down the process into three steps:

• The client-facing experience, in which the data was gathered by Anvil;
• Lender review, which triggered a workflow process to generate the loan documents; and
• Submission to the SBA, which Sunrise handled by API.

2. Decide where automation reaps the most benefits

For some small banks, such as the Bank of Franklin County, a Washington, Mo.-based bank with $296.9 million in assets, this was as simple as adopting an e-signature solution.

For others, this meant automating the application process via online portals or pulling data from PDFs via technologies such as optical character recognition or RPA bots. Some FIs also automated onboarding with solutions that pull data from public filings to auto-fill information, while others automated the entire process.

Once a process is identified for automation, outline how it should work. Often companies will simply automate the manual process, which may be inefficient, said Gartner analyst Nicole Sturgill, referring to automation projects, and this advice applies to PPP loans, as well.

3. Given a short timeline, partner before building

Steve Jones, chief operating officer at $1.3 billion Suncrest Bank, recommended banks partner with fintech vendors rather than attempting to build their own solutions, and suggested consulting with a trade group for connections and recommendations, like the Independent Community Bankers Association or a local banking association.

“Those associations have already vetted and done some of the vendor due diligence, so you have a little bit more confidence going into that,” Jones said.

4. Refine and evolve the automation

RPA was a popular choice for automating the PPP process and for integrating with the SBA, to the surprise of some in the industry. FIs both large and small used their RPA for a variety of automations, according to Ken Mertzel, global industry leader of financial services for RPA vendor Automation Anywhere. On one end of the spectrum, Vista Bank, a $1.2 billion regional institution in Texas, used RPA to process a backlog of applications by extracting information and loading it into its core loan process, Mertzel said. On the other end of the spectrum, the $170.3 billion KeyBank used RPA to create its own automated internal operational process.

“In the early days, it was taking the information from the applications and putting it into their own systems and their own processes, as well as submitting it via the E-Tran system,” Mertzel said. “But we’ve seen it evolve.”

Now, RPA is being used to integrate data from the application process into core processing systems, he added.

5. Finally, keep it going

Some banks found the tools they used to automate PPP could be used to automate other operations. For example, Suncrest realized it could apply its automated PPP approach to SBA 7(a) traditional loans using loan servicer SmartBiz, with which it had partnered for PPP.

“We had partnered with SmartBiz to take some of those excess applications that were coming through that we just couldn’t get to, and SmartBiz did a great job with that,” Jones said. “So we started to talk about the post-PPP environment and our desire to look at their platform for the automation of the SBA 7(a) loan applications and processing.”

PPP automation Do’s and Don’ts

• DO: Think through desired processes rather than automating the current process.
• DO: Understand there are different options for automation; make sure the technology fits the use case.
• DO: Consider integration capabilities. Should the solution integrate with the core?
• DO: Make sure to manage any changes upstream or downstream from the process to ensure bots work effectively.

• DON’T: Start with a complex process if this is a first automation. Start small.
• DON’T: Automate in isolation. Make sure IT knows about any automations the business lines deploy.
• DON’T: Approach PPP automation with a technology-first mindset. Prioritize the business value.

Bank Automation Ignite, taking place March 2-3, 2021 as a virtual experience, is the event for inspiring automation initiatives and investment in financial services. Formerly the Bank Innovation Ignite conference, this new focus creates an event where financial services professionals can discover new use cases and technologies that are accelerating automation in banking. Learn more and register for the event at www.BankAutomationIgnite.com.