By Roy Urrico
Credit unions and community banks are not taking full advantage of the data they own. Combatting this issue is the mission of two former bankers who founded Quantalytix. The enterprise platform, including its newly launched modern loan portfolio management tool, allows community-based financial institutions to utilize previously inaccessible information.
Birmingham, Ala.-based Quantalytix co-founders Chris Aliotta, president/CEO, and Will Bryant, COO, who together have 20 years of banking and lending experience, observed that financial institutions hold a tremendous amount of data, yet still struggle to add top-line revenue or bottom-line cost savings. In 2016, unsatisfied with available technology platforms used for risk and loan management, where data was extremely siloed, they began developing a platform for community financial institutions to change the lending game.
“The reason we started this company is because we had so much hands-on experience with what technology was currently out there. We just said, we are at a point now with technology where there needs to be a new standard. And so, we left (banking) and started this company to basically set that standard,” said Bryant.
Quantalytix’s vision is to provide a decision-making platform that eliminates “analysis paralysis” by presenting sophisticated information with simple and intuitive software. The enterprise bank management platform integrates with existing systems and has built-in quality assurance checks and automation to ensure both integrity and quality while saving financial institutions time.
Aliotta emphasized, “We're trying to position Quantalytix as being more of a central nervous system for helping run these organizations, both from a business intelligence perspective and from a data and systems perspective. That is one thing that I really want to get out there, which is we take data very seriously, our customers own their data.”
Adapting to Financial Institution’s Needs
The cloud-based Quantalytix platform compiles and aggregates performance metrics of credit unions and banks, enabling its financial institutions’ management to quickly monitor efficiencies, identify problems and opportunities, and effectively plan for growth. The information can also allow different levels of access depending on specific roles and responsibilities. It also provides users with the ability to drill down on specifics as needed.
The system streamlines the ever-increasing amount of data financial institutions manage in an easy and sophisticated manner, seamlessly integrates with core accounting and loan origination systems. It has built-in quality assurance checks and automation to ensure both integrity and quality while saving users’ time.
Aliotta said, “One of the things that we are trying to emphasize is that we are not in the business of just dropping software on our customers’ laps. Our approach is to be more hands on at first. The reason for that is every customer's unique.” He maintained the company first determines each financial institution’s objectives, and then based off those aims, provide different dashboards or different application components that Quantalytix can position to align with those financial institution objectives.
“For example, if you are a mortgage company that wants to evaluate the performance of its portfolio, we can give a good view as to what interest rates you can charge certain customers that you have relationships, and which customers are the most profitable, and cohort and rank them,” Aliotta added.
“From a credit union perspective, the important part is being able to see which members have significant deposits, so you can better cross-sell and serve them, and also do so in a way that allows them to responsibly manage their debt and services that they need,” said Aliotta. “That's one of the great benefits if you're a credit union, is that (Quantalytix) will enable (the credit union) from a loan pricing and loan interest rate setting position, the ability to custom price on an individual or on a household level.”
Versatile and Flexible
A key feature of the Quantalytix platform centers on its the customization capabilities, especially “when we start talking about what we would call key performance indicators,” said Aliotta. Those can be thresholds for managing regulatory responsibilities such as maintaining certain ratios. Those are all adaptable by the client.
“So, for a credit union that may have different lending or different requirements around how they serve their community, we are able to aggregate it and set triggers and flags and tolerances so that they can see when they are in compliance or when they are not in compliance. Just kind of give them a quick heads-up as to how they are doing,” Aliotta stated.
If a credit union has any issues with cloud-based data hosting, Quantalytix can host the financial institution’s data on premises, and still maintain its cloud architecture. “We've got a lot of cool tricks up our sleeve and interesting things that we're doing here, to really kind of live that mantra,” Aliotta suggested.
Quantalytix covers the entire balance sheet. “For a depository institution, that would mean the deposits they take on, even some of the debt instruments they may issue on the asset side,” said Aliotta. That could encompass home equity line of credits (HELOCs), mortgages, auto loans, commercial and industrial loans (C&Is) and CRE. “You name it, we have experience with it. That is very valuable when you are starting to look at holistic relationship management.”
Aliotta said Quantalytix offers a complete perspective coming out of the gate. “There are a lot of software (companies) out there that'll claim to do dashboarding, but very few can actually compile a holistic view and do so in a way that actually advances the institution’s internal initiatives.”
That insight covers the commercial side as well as the personal side. “I think from a commercial perspective, the deposits matter even more,” said Aliotta. “From a funding position (the loan tools) will allow you to charge or give them a more competitive rate than a peer of yours or a competitor of yours.”
Accessing the Relevant Data
Aliotta explained Quantalytix does not face the customer at all. “We're not going to go out there and make your loans for you, but what we do is give the air coverage that supports the actions for the decisions the financial institutions want to make.” If a credit union or bank offers a specific interest rate to a certain type of customer, the system would support that decision.
“The whole idea here is to remove what we call ‘analysis paralysis’ within organizations,” Aliotta explained, who added there is no shortage of data available to financial organizations. “These community financial institutions are sitting on a trove of value whether they know it or not, what we are doing is we are helping extract that information, we are actually mining it for them and telling them exactly what to do.”
Aliotta clarified that what Quantalytix does is consolidate the data and provide the platform and tools to utilize the information. “Especially as we grow our platform and our analytics capabilities, we will be using a lot of those tools to help prepayment models, credit default models, and even help create a pricing engine, more or less. We do not heavily rely on artificial intelligence or machine learning, but we have built the system to support activities and actions that an organization might want to partake in.”
Data protection is also important to Quantalytix. The SOC 2 certified platform relies on encryption and security, which is an integral part of the company’s DevOps process, noted Aliotta. “There are certain things that we can do that only allow our customers to unlock that data, meaning we would never be able to see it.”
Freeing Data from Hostage
The Quantalytix system, built on what the company calls ETL, which represents extract, transform and load, is core and data source agnostic. Aliotta emphasized, “We have built our system to be really flexible to whatever the institution is using. In some cases, we do not even need to touch the core directly, just a simple data poll or data dump on a daily basis or whatever periodic basis. That helps avoid some API fees that certain cores like to charge; and eliminates or reduces, access costs and access burdens to our user base.”
Aliotta highlighted the importance of data ownership. “Community financial institutions should never allow their data to be held hostage from them.” He understood that is a big statement to make. “Without owning their data, (FIs) get stuck with vendor lock-in and they cannot be flexible.
Quantalytix is looking to build an ecosystem where different systems, whether they are loan origination, marketing or any credit collection systems, “can all play nice and cohabitate and can actually have of all their information joined into one source,” said Aliotta.
Aliotta is hoping to see less of what he calls, “this walled-garden philosophy that has permeated our industry for a long time. We are here to smash that because quite frankly, as a former banker, I tired of having to deal with those walls and those hurdles.” He continued, “I can understand from the core provider's perspective of trying to harden their systems and make sure that no third party can damage it. But there is an element nowadays where I think that is a relic of the past that no longer needs to persist into the future. It is doing their customer base a great disservice, and keeping banking sort of stuck in the nineties.”