BOSTON–Watch out credit unions: it isn’t just the new, non-traditional fintech players that are setting new standards in terms of loan service—some big banks, are too.
While often derided as slow and bureaucratic, some big banks are displaying some new nimbleness, including the 198-year-old Eastern Bank here, which is now approving small business loans in less than five minutes.
The $9.6-billion bank said what used to take three or four weeks due to long checklists and lots of paper around loan requests has been reduced to about the time it takes to get a cup of coffee, according to the Wall Street Journal. In this case, the turnaround time applies to loans up to $100,000, and is for existing customers only where a ready credit history is available.
“It is pretty rare for a customer to need the money in five minutes,” Dan O’Malley, who leads the bank’s technology arm, known as Eastern Labs, told The Wall Street Journal. But a swift approval, he said, “sends a signal to the customer that we value their time.”
The Wall Street Journal noted that other big banks have also been working to speed loan approvals, including J.P. Morgan Chase & Co., which recently signed a deal with online lender OnDeck Capital to provide small-business loan approvals in minutes and funding the same or next business day, and Bank of America, which began offering a new streamlined line of credit last summer that shaves about two weeks off its typical three-week process.