Cloud Banking Firm nCino, Codat Team on SMB Loan Underwriting

Codat, an API for small business data, will be partnering with cloud banking firm nCino to automate and accelerate the ways banks can underwrite small business loans, a press release said.

nCino’s services help cut down the time it takes banks to transfer information from a borrower’s financial statements into the bank’s financial analysis program. By partnering with Codat, it will be able to add more efficiency to underwriting loans.

The release says 97% of financial institutions have plans for digital transformation, though only 30% are working on implementing them, according to a BDO study from last year — with the reasoning being that most banks have practical challenges and expenses that make barriers for them to add new tools.

“The process of underwriting small businesses remains incredibly labor-intensive for most institutions,” said Codat CEO Pete Lord. “A large number of the banks we speak to are still having to request financial data from customers on a quarterly basis and manually input that data into their loan management system – a process that is prone to error and a pain for the customer. The power of this partnership is that we’ve built our automated data collection and categorization capabilities directly into the nCino platform, which is already used by over a thousand institutions worldwide. They can get started now with very little lift to implement.”

And Thomas Byrne, General Manager, EMEA at nCino, said the partnership will “further automate processes that enable financial institutions to significantly improve efficiency, accuracy, and create cost savings whilst being able to respond to actual customer need in real time.”

Codat has made other partnerships lately, including with embedded finance startup Monite, a PYMNTS report said.

Read more: Monite, Codat Team to Allow Embedded Invoices, Bill Payments in Apps

This will see the companies incorporating accounts payable and accounts receivable capabilities into existing apps. Small businesses use over 40 apps on average to manage finances and various things like accounting, expenses, sales and analytics. Monite co-founder and CEO Ivan Maryasin said there needed to be a super-app feature to roll it all together.