July/August 2012

Flexibility, Flexibility, Flexibility ABL, Factoring Software Must Be Tailored to Both Borrows & Lenders’ Needs

Opportunities are there for those with the tools and talent to seek them out. Even with the additional requirements placed on lenders by regulators and auditors both the factoring and asset-based lending industries have experienced growth in recent years. William Stucky & Associates’ Roseanne Doyle discusses the software requirements and flexibility needed to ensure success for both lenders and borrowers.

William Stucky & Associates, Inc. (WSA) has been a provider in the asset-based and factoring software markets for over 33 years. During this time the company has developed and implemented systems that support the needs of lenders in all tiers of the market -— from the entrepreneurial startup to the Fortune 100 bank. It is through this experience and close working relationships with lenders that WSA products feature applications that meet the technology, business, and regulatory trends of today’s lender and borrower.

The NT\ABL System, WSA’s asset-based lending system, offers ease of use, multi-currency and multi-lingual capabilities that have allowed for expansion of WSA ABL and factoring systems into the European, South African and Canadian markets. WSA loan systems make for a time tested and stable solution after several years of development along with rigorous lender use. The NT\ABL system was reintroduced under the .NET framework to provide the latest technology.

The innovative and competitive lender must be able to offer a multitude of lending options to the borrower. The key is being able to offer flexibility in terms of pricing and deal structure for the borrower while ensuring collateral control/security and regulatory compliance for the lender.

Flexibility for the lender includes: systems that provide the opportunity to deliver high levels of customer satisfaction while complying with the ever increasing requirements placed on banks for a safe and secure way to deliver customer information and internally control data. Control for the internal user is WSA system/program level access menus — checks and balances tailored to the individual employee. Similar controls are established for the external user (borrower). Borrower facing Web portals are accessible through secure Web servers hosted by WSA or the lender.

Flexibility for the borrower includes: systems that offer the 24/7/365 access needed to remain competitive in today’s business world. This is accomplished with robust borrower Web portals. These portals offer the borrowers real time access to loan and collateral balances, daily and monthly reports and data sharing via direct data entry or file transfers.

Regulatory trends and requirements have been one of the motivators behind much of the base system enhancements and sought after features of the WSA product line. As times become more challenging for both the lender and the borrower, banks and external agencies have placed the responsibility of data control on both the applications and processes around the applications. To that end, software products must carry controls on many levels: system access, menu access, program access, field level access and employee dollar limit enforcement.

Each user has a lender defined profile with access level, lending limits and other controls. Our systems require a user sign-in and password and can be easily adapted to a single sign-on such as Integrated Windows Authentication.

For example, NT\ABL and ABLM.NET are delivered to the lender with group access enforcement. Group definitions include the programs and functions that group members are allowed to execute. Users are assigned to one or more groups and are limited to the types of transactions within that group. This provides the banks the opportunity to create and enforce a separation of duties; group one team members will enter collateral with no access to funding or advance approval, group two team members will only have the opportunity to approve or decline funding requests with no opportunity to modify collateral or availability numbers.

Certain factoring systems, such as NovaCS and Pegasus, carry even more levels of control, inasmuch as the typical factoring company will have large staffs managing millions of detail collateral elements. Similar to the ABL systems, the factoring systems will enforce separation of duties and in addition to enhanced warning messages to both account relationship managers and operations managers.

An example of this type of messaging would be a collection specialist contacts a debtor for payment and is informed that the $100,000 invoice is in dispute. The collection specialist will record all the information and attempt to finalize the dispute as an ineligible adjustment, the application will test the user’s profile for dispute authority limit — find $25,000 is the maximum allowed transaction amount — determines a collection supervisor will need to provide ultimate approval of the ineligible adjustment and automatically forward a work queue to the supervisor.

All the activity is in real-time and will only update once proper approvals are obtained. With workflow queuing, all users are immediately aware of tasks that require their attention. All transactions are time/date/user/program ID stamped for audit and research purposes.

Our firm has enjoyed the growth of its ABL and factoring applications as market tested solutions for the international and domestic lender. Through this experience WSA has come to understand that regulatory controls are not limited to lenders in the U.S. As such, our systems are scalable across multiple users, offices and countries, easily meeting the demands of today’s lenders, their sophisticated borrowers and regulators.

As a vendor to these domestic and international banks and lenders WSA has seen the trends for greater regulatory controls extend beyond just applications to its credentials as an “approved” vendor. The process of becoming an approved vendor has taken on many levels of vetting. Vendors are routinely subjected to extensive background, criminal, financial review prior to, or as a part of, the actual application evaluation. Our firm routinely participates in annual re-evaluations with information about staff, internal controls and on-site visits by internal and external auditors representing our lender clients.

Commercial lenders have long understood what it takes to lend working capital through prosperous and lean economies. Navigating the last few years has been tricky but rewarding for most as trends in new business increase and reserves/losses level out and begin trending downward.

Opportunities are there for those with the tools and talent to seek them out. Even with the additional requirements placed on lenders by regulators and auditors both the factoring and asset-based lending industries have experienced growth in recent years. Industry associations and lenders groups periodically review and educate members regarding legislative and regulatory changes that have simply become “part of doing business.”

As the lending community, its financing products, borrowers, regulators and auditors continue to evolve our firm, for one, will continue to view its role in supporting the asset-based and factoring industries with the most flexible, responsive and trustworthy products available today.

Roseanne Doyle is vice president and senior project manager for William Stucky& Associates. Doyle has been with WSA for 14 years. Prior to that, she worked as a retail banking manager and factoring account executive for 15 years in Atlanta and New York City with NationsBank. She has been able to successfully transition her many years of banking and factoring experience to the role of senior project manager for the WSA line of factoring software. Her present responsibilities include sales, training, installation and ongoing support of the NovaCS and Pegasus systems. These systems process in excess of $31 billion in factored volume annually with installations in U.S., UK and South Africa. As a liaison between the lenders and WSA programmers, Doyle is exposed to the ever-changing and rapidly evolving technology demands placed on the banks today by clients, customers, regulators and trading partners.