Why are the “too busy” not seeing the waterfalls ahead? Just this past month I witnessed an auto lease transaction that required the lessee to sign or initial 14 documents in a total of 23 places. It seems ludicrous that any bank would continue to burden customers by insisting that they take the time to read and sign this many documents as a routine matter of doing business. Why would the customer consider deepening their relationships with your bank when a simple transaction is forced to be this complex? The lender was asking for far too much information in this case, and if I were the borrower, I would “run away, run away,” as the Monty Python line goes. When the lender was pressed to explain the need for much of the additional information, they were at loss. I can honestly report that it does not take this much paperwork to either disclose or secure debt—even in the highly regulated times we live in.

In a recent Nolan industry study on real-estate-based loans, the findings revealed that a gap in cycle time performance ranged from three days to nearly two months. At the expedited end of the range were scored loans for existing relationships; at the other extreme was an excruciating process that included defining needs, appraising collateral, assessing the ability to repay, structuring the deal, and romancing the deal through the minefields of the bank’s credit process. I can’t imagine it. When we talked to the borrowers who took months, they were as puzzled as we were regarding the time and effort it took to get approval and booking. “It takes industry knowledge for complex deals,” said the two-month banks; however, my take, based on 34 years in the industry, argues that lender experience and knowledge should shorten the overall process for customers, not lengthen it. The gap is real but the argument for its existence is not.

I do believe that regulations and credit history in some institutions have resulted in policies, processes, and practices that limit the risk for some banks. But the data and experience tell us that manual processes and too many levels of oversight will also limit a bank’s domestic growth and the likelihood that customers will rave about your bank to their friends and family. And by the way, the gap is getting wider.