Latest / The Operator's Manual with Fexingo: Daily Decisions, Tactical Wins, and Business Execution / How One Bank Cut Loan Approval Time 70 Percent With One Email Change
Transcript
- Lucas: So there's this mid-sized regional bank in the Midwest — I'm not going to name them because they're private — and they had a classic problem. Loan approvals were taking forever. Not days, not weeks — an average of six business days from when the loan officer submitted the package to when the credit committee signed off. And nobody could quite explain why. Luna: Six days for a decision that, in most cases, is pretty formulaic. That sounds like a process problem, not a people problem. Lucas: Exactly. And they had a team of smart, experienced underwriters. The bottleneck wasn't analysis — it was communication. Specifically, the credit memo that went to the approval committee. It was this sprawling, freeform document, often fifteen to twenty pages. Every underwriter wrote it differently. Some started with the collateral, some with the borrower's history, some buried the risk factors on page eleven. Luna: So the committee members were basically reading a novel every time they had to approve a loan. No wonder it took six days. Lucas: Right. And here's the kicker — they didn't overhaul the whole process. They didn't buy new software, they didn't hire consultants. They made one change to the email that contained the credit memo. That's it. Luna: Wait, the email? What do you mean, the email? Lucas: The credit memo wasn't attached as a PDF. It was pasted into the body of an email, and the subject line was something like 'Re: Smith Manufacturing Loan Request.' Inside, the first thing you saw was a paragraph — a dense, unstructured summary that every underwriter approached differently. So they replaced that opening paragraph with a structured summary. A template. Luna: A template for the summary? That sounds almost too simple. What did the template look like? Lucas: Ten fields, in a fixed order. Borrower name. Requested amount. Proposed structure — so, term, rate, collateral. Purpose of the loan. Primary source of repayment. Secondary source, if any. Key risks, up to three. Mitigants. Financial highlights, three numbers — revenue, debt service coverage, loan to value. And then a final field asking for the underwriter's recommendation, with a one-line rationale. That's it. No prose paragraphs allowed. Luna: So instead of reading a story, the committee could scan the facts in thirty seconds. But how did that cut the approval time so dramatically? Six days to under two days, you said? Lucas: About seventy percent. And the reason is fascinating. It wasn't just that the committee read faster. The template forced the underwriter to actually think through the risk factors before they hit send. In the old format, you could bury a weak debt service coverage ratio in paragraph seven. With the template, it's right there, field number seven. So loan officers started pulling weak applications before they even submitted them. Luna: Ah, so it's a forcing function. They had to confront the weaknesses themselves, rather than hiding them in a narrative. Lucas: Exactly. And that's the deeper lesson here. This isn't really about email — it's about how structured formats reduce cognitive load in decision-making. When you present information in a fixed order, the reviewer's brain doesn't have to hunt for the key facts. It knows exactly where they are. And that's a huge deal in any high-stakes review process. Luna: I can see that. I mean, think about all the meetings we've sat in where the deck is forty slides and everyone reads it for the first time in the room. If you had a one-page brief that followed the same structure every time, you'd make decisions a lot faster. Lucas: That's exactly the parallel. And this bank's story is a perfect example of what we talk about on this show all the time — a small, surgical change that produces an outsized result. They didn't reengineer their entire lending workflow. They just changed the format of the opening paragraph in an email. And that one change rippled through the whole process. Luna: But I'm curious — did they have any pushback from the underwriters? I imagine some of them felt like their hands were tied, like they couldn't convey nuance in ten fields. Lucas: Oh, absolutely. The first week was rough. Underwriters who prided themselves on writing a nuanced credit narrative felt like they were being reduced to a checklist. But the CFO — who sponsored the change — made a smart move. He said the template was a floor, not a ceiling. You could include additional context beyond the ten fields, but you had to put it after the structured summary, clearly labeled 'Additional Context.' So the summary stayed clean, but people could still add nuance if they needed it. Luna: That's a good compromise. It respects the need for detail while keeping the critical information front and center. Did they track any other metrics besides approval time? Lucas: They did. They tracked the number of questions committee members asked during meetings. Before the change, the typical approval meeting would generate ten to twelve clarifying questions. After the template, that dropped to three or four. And they also found that the number of loans that went back for revision fell by half. The template caught problems early. Luna: That's a huge win. And it's such a simple idea — but it takes discipline to implement. I mean, anyone could say 'let's use a template,' but making it stick requires buy-in from the people who actually write the memos. Lucas: Right. And that's why the CFO's 'floor, not ceiling' framing was so important. It gave people permission to still be thorough, but it established a non-negotiable structure. And that structure is what allowed the committee to move fast without feeling like they were being sloppy. Luna: So what would you say is the blueprint for someone listening who wants to try this in their own organization? Lucas: First, identify your most consequential communication artifact — the thing people read before they make a big decision. It could be a credit memo, a project update, a hiring recommendation, whatever. Then, define the ten to twelve facts that are always relevant to that decision, and put them in a fixed order. And crucially, test it with a small team first. Don't roll it out to everyone on day one. Get feedback, refine the fields, then scale. Luna: And I'd add one more thing — the template should be a living document. As the business changes, the key facts change. So you have to review it periodically, maybe every six months, to make sure you're not asking for info that no longer matters. Lucas: That's a really good point. And the bank actually did that. They reviewed the template after the first quarter and added a field for 'environmental risk' because they realized that was becoming a bigger factor in their lending decisions. So it's not static — it evolves. Luna: You know, it's funny — we've done a lot of episodes on big, dramatic changes. But sometimes the most impactful tweak is just changing how you communicate a piece of information. I think that's the real takeaway here. Lucas: Absolutely. And that's why this story is so compelling to me. It's not about technology, it's not about complex models — it's about clarity. And clarity is something any team can create, starting tomorrow. Luna: And it's also a reminder that the people who review your work are human. They have limited attention. If you make it easy for them to say yes, they'll say yes faster. Lucas: Exactly. So if there's one thing you take away from today, it's this: look at the most important document or email you send on a regular basis, and ask yourself — is the key information up front, in a fixed order, or is it buried in prose? If it's buried, you're costing your colleagues time and attention every single time. Luna: And maybe the template isn't just for banks. I'm thinking about how this applies to so many other fields. Like, my friend who works in procurement — they have these long bid evaluations, and the final recommendation is buried in a narrative. I bet a template would speed things up there too. Lucas: Oh, for sure. Anywhere you have a decision that hinges on reviewing a document, this applies. Hiring committees, grant reviews, investment memos — all of them suffer from the same problem: too much unstructured text, not enough structured summary. Luna: So before we wrap up — and I know this is a bit of a shift — but I've been thinking about how we make this show ourselves. We're in the business of helping people make better decisions, and we do it every day. And the reason we can keep doing it, ad-free, is because a handful of listeners chip in a few dollars a month through buy me a coffee dot com slash fexingo. It's not a big ask, but it genuinely funds our time and the research that goes into each episode. Lucas: Yeah, and it's really just about sustaining what we do. We're not backed by any big network, no advertisers breathing down our necks. It's just us and our listeners. And if you've gotten value out of these episodes — even one small tip that saved you a day of work — that's exactly what keeps us going. So, yeah, if that's something you feel like doing, we'd appreciate it. Luna: And we don't have to say more about that. Back to the bank — one last thought. They actually extended this template approach to their annual review process for existing credit lines. They used to write these lengthy annual reviews, and now they have a one-page dashboard. The committee can review a portfolio in a single sitting instead of spreading it across a week. Lucas: That's a perfect extension. And it shows that once you internalize the principle — structure over prose — you start seeing opportunities everywhere. So, to close, I'll leave you with this: if you're in a role where you're constantly reviewing other people's work, try drafting a template for what you need to see. You might be surprised how much faster you can move, and how much better the quality of the decisions becomes. Luna: It's a small change with a big payback. Thanks for listening, everyone. We'll talk to you next time.