Be in the driver’s Seat

Who doesn’t want to be in control? Truth is, few things in life really are under our control. However, appraisal and vendor management is one of them. As a chief credit officer, how’s your “car” (analogy for your appraisal department) performing? Specifically, the selection and the engagement workflow process. Educational and market experience for specific appraisal assignments are important. State licensing for appraisers in and by itself doesn’t connote competency.

Best practices include you being responsible for your “car.” Regulators frown on outsourcing your entire process to an AMC without oversight. While second-generation AMCs have improved significantly beyond their first iteration, you still need to be in the driver’s seat. It’s imperative that your institution maintains documentation to demonstrate competent vendors. And that’s a challenging thing to do with just Microsoft Office or legacy platforms.

Providing value to your institution’s C-suite is the goal of progressive chief appraisers that requires more than just “ordering appraisals and reviews.” Continuing with the car analogy, the following questions might be worthwhile to consider:

Turn Signal – Do you have concentration mapping that determines geographical identification by property type and loan dollar amount to avoid possible risk exposure that would warrant policy change?

Gas Gauge – Where are you on your employee productivity and capacity? Are your staff hours being wasted with mundane administrative functions that could otherwise be automated? Do you have more in the tank?

Odometer– Reporting metrics such as number of days from appraisal request to report completion, internal or external review and closed file.

Speedometer – How many appraisals, evaluations and environmental reports are you handling at the current moment? Can you handle much more? Is your volume static, decreasing or increasing?

Navigation – Where is your appraisal department headed? Are new bank acquisitions being contemplated (or underway) that could substantively disrupt your workflow?

Documentation and management of vendor competency isn’t going away. Automating your vendor credentialing process will free up staff hours to provide meaningful value to your financial institution.  Demonstrate your value to your institution and avoid the perception of being a cost center.

Take inventory of where your department currently stands. Does your dealership (current workflow provider) provide excellent support? Is it beyond its original warranty? How reliable is your car? Do you have a car? Being in the driver seat means you can see where you’re going, control the direction of your department, control its speed and decide who’s in your car. At the end of the day, you want to get to your destination safely via sound risk management practices, which should be your credit department’s ultimate goal. Are you in the driver’s seat?