Modern Bank partners with OakNorth to support US businesses through the Covid-19 crisis

Apr 12, 2020

  • Assuming 10m SMBs (1/3 of SMBs) apply for the CARES Act’s Paycheck Protection Program, Banks will need to process approx. 50x of their normal annual volume in the next 30-60 days which is putting immense pressure on participating lenders;
  • OakNorth has designed an end-to-end solution - from application and document collection to pre-screening and forgiveness - to help regional and community banks process this unprecedented volume:
  • Modern Bank N.A., the commercial bank headquartered in New York City, is leveraging OakNorth’s solution to scale its operational capacity and enable it to more efficiently process the influx of loan demand within its existing risk management framework of operational controls;
  • By leveraging the solution to participate in the CARES Act’s PPP, Modern Bank joins the US government’s efforts to distribute $600bn in payroll relief to US businesses who are fighting for survival due to the Covid-19 pandemic.

OakNorth, the next-generation credit analysis and monitoring platform, and Modern Bank N.A., the FDIC-insured, full-service commercial bank headquartered in New York City, have today announced a strategic partnership to support US businesses through the COVID-19 pandemic.

Through the recently-launched Paycheck Protection Program as part of the CARES Act, Modern Bank will provide businesses with less than 500 employees with loans up to $10m to cover payroll costs, interest on mortgages, rent, and utilities. However, as evidenced by similar loan programs around the world, Modern Bank expects to see a dramatic influx of applications as hundreds of thousands of businesses rush to apply for the funding lifeline. To ensure it is able to efficiently manage this increase in demand, Modern Bank is partnering with OakNorth, which has designed an online workflow specifically for banks participating in the Paycheck Protection Program, to help with document collection and end-to-end process streamlining. It will also provide participating banks such as Modern Bank with additional operational capacity through pre-screening of applications.

The OakNorth Platform provides its bank partners with the insight and foresight they need to more holistically and profitably lend to the “Missing Middle” – the growth businesses who are the backbones of communities and economies globally. In order to support its bank partners who are participating in the PPP, OakNorth deployed an agile team to quickly build a bespoke end-to-end solution. As a fully cloud-hosted solution, the Platform is easy and fast to deploy, enabling banks such as Modern Bank to begin taking their existing borrowers through the Program within hours. The Platform’s process design ensures that Modern Bank retains complete control of key decision-making and risk-management processes, including: loan eligibility, authentication criteria and checks, compliance review, the credit decision, and the forgiveness eligibility and approval.

Rishi Khosla, co-founder of OakNorth, commented: “Our Platform was built to help get credit to the businesses that needed it most, faster. Modern Bank wants to support US businesses through this crisis, and we want to play our part in helping them and other banks participating in the Program, do this as quickly as possible. As we’ve seen with similar loan programs around the world, banks are experiencing call centre and web traffic that’s up to 50 times the normal levels and are simply unequipped to deal with this level of volume. The operational efficiency gains our solution provides through process streamlining and automation, as well as pre-screening of applications, will enable lenders such as Modern Bank to effectively manage this increase in demand, which means much needed loans will go out to the small businesses who desperately need them.”

Bippy Siegal, founder of Modern Bank, continued: “As a commercial bank built by entrepreneurs, for entrepreneurs, Modern Bank is led by a team that leaped at the chance to be a part of the solution in the midst of the COVID-19 pandemic. The CARES Act’s Paycheck Protection Program gives us the opportunity to serve our existing clients, as well as a much larger universe of commercial clients, who are racing against the clock to get the funds they need to support their valuable businesses.Working closely with our partners at OakNorth, we were able to move quickly to put in place the solution in alignment with our institutional mission: to deliver superior products and services that empower our clients to achieve their individual financial goals – for their businesses, for their family, and for themselves.”

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