TCF Retail Lending SMART Data Case Study
May 12, 2015
2
Opportunity
Rising. Contents
• TCF & Retail Lending Overview
• Historical Timeline
• Current State
• Proposed New Approach
• Overall Business Case
• Q&A
3
Opportunity
Rising. TCF Overview & Retail Lending
TCF Corporate Profile • $20 billion national bank holding company headquartered in Minnesota
• 45th largest publicly traded US based bank holding company by asset size
• 379 branches in 8 states
• 85% of total assets are loans and leases
Retail Lending Overview • $5.6 billion of residential mortgage loans-$3.0 billion first mortgages and $2.6 billion
junior lien loans • Primary strategy is to originate high credit quality secured loans for investment and for
sale
• Significant focus in 2015 in improving Finance systems, processes and controls
4
Opportunity
Rising. Historical Timeline
RLBI Started Sept ‘13
RLBI Release 1 Complete
July ‘14
RLBI Release 2 Complete
May ’15 MERF File
Automated
RLBI Release 3 Was
Slated for Dec ‘15
RLBI Releases 4+ Were Slated Through 2016
RLBI
EVOLV CRA Portfolio
Launch Oct ‘14
Move Away from RLBI to EVOLV Concluded Feb ’15
Enterprise View Obtained
-Corporate Leadership -IT Leadership Included
-K2 and Rueben Creative
CRA Portfolio on EVOLV Apr ‘15
K19 Being Presented for Full EVOLV Implementation,
Today
All Loans in EVOLV Dec ‘15
EVOLV Fully Implemented
Mar ‘17
Participation Capability
Mar ‘16
EVOLV
5
Opportunity
Rising. Summary of Current State
Servicing Systems
Recon
Credit Quality Reports FAS 65
HFS
REO
Non-Accrual / Re-accrual
F91
Charge-off System
SBO Loans Run-off
Programs (Command
Protect)
REIT Acctg
F114
ALLL / ERM
TDR
Recon
Cash and Operational Entries from
Shaw
Shaw Servicing System
SBO Portfolio - OCWEN
SBO Portfolio – PNC and Future
Loan
Dat
a Fl
ow
R
isk
and
Fin
ance
Man
ual
P
roce
sse
s
GL / Reporting
GL
Essbase
Future Processes --- PCI Accounting?
CECL?
M-E Financial Reporting
File
3 Reports (Remittance, DQ,
Summary)
TBD CQDB LDB RLDM
Fiserv Claims
CRA Purchase Program
~70% data movement
and 30% data
creation
Roll-forward Reports
6
Opportunity
Rising.
Architectural / Data Perspective -- Industry Best Practices
6
Source 1
Source 2
Source 3
Source 4
Source 1
Source 2
Source 3
Source 4
Historical Model: Distributed Ownership Enterprise Centric
Warehouse Distributed
Applications
Distributed responsibility for sourcing, staging and end user reporting
Centralized responsibility for enterprise data, MDM assets and LOB control and
dictate their specific needs
Industry Trending Model:
7
Opportunity
Rising. Proposed New Approach – Enterprise Business Intelligence & Operational Storage
RL Data Stage / Extract / Cleanse / Transform
Application Hard Coded / Infer/ Calculate
RL Data Mart
Original RLBI Scope
Blended all three
elements
Focus on Finance Reports only as
output
Non-Finance reports some day
Retail Lending focus
“If you build it they
will come”
Release 2, to be done in Q2, automates
Month End Reporting File
Maintain Releases 1
and 2
Shaw Harland RL Other
RL Finance Reports
Enterprise Data Stage & Operational Storage
Evolv Infer / Calculate
Enterprise Database
Shaw Harland RL Other
Accounting (FAS 91, Non Accrual, etc)
Finance Reports
Reserving (TDR, guideline, etc.)
Forecasting & Stress Testing
Evolv Proposed
Solve RL Finance Needs
Data layer includes
inference, enrichment and
identification
Application layer includes
calculations, model execution, and
automating manual processes
Scalable / Flexible
Much more than
just reporting
Enterprise BI
Refocus on data staging &
operational storage
Enterprise
project
Operations
Credit
Risk
Unanticipated Needs
RLBI Original Scope Proposed Scope
Other BU’s
8
Opportunity
Rising.
GL / Reporting
Source Systems
Shaw Cash and Operational
Entries
Shaw Servicing System
LSBO Portfolio – OCWEN, Education
Lending
SBO Portfolio – CRA Loans
Loan
Dat
a Fl
ow
GL
Enterprise
Data
Warehouse
RLBI Integrated Risk and Finance Solution for Loans
Adaptor Adaptor
Credit and Reserving
FAS114 / TDRs FAS 5
Loan Accounting and Forecasting
Originated Loan Accounting Acquired Loan Accounting
Loan Risk Analytics and Model Execution
Analytics Model Execution Cash Flows Stress
Credit Review GAAP and Adjusting
Entries; Loan Level
Extracts
Ris
k an
d F
inan
ce A
uto
mat
ed
P
roce
sse
s
Common Data Layer for Risk and Finance
Loan Level Risk and Finance
Reporting
Implemented Current Implementation
RLDS
Risk,
Finance &
Reporting
Users
Data Enrichment & Management
EVOLV Solution
9
Opportunity
Rising.
Architectural / Data Perspective -- Scalability Comparison
Financial Management Functions
Forecasting ALLL & Credit
DFAST & Risk
Accounting Reporting Loan Sales
Forecasting ALLL & Credit
DFAST & Risk
Accounting Reporting Loan Sales
Enterprise View
Winthrop Equip
Finance Inventory Finance
Gateway Retail
Lending Commercial
EVOLV Applicability
RLBI Applicability
Winthrop Equip
Finance Inventory Finance
Gateway Retail
Lending Commercial EVOLV Applicability
RLBI Applicability
10
Opportunity
Rising. Business Case for EVOLV
EVOLV vs. RLBI Business Case for
EVOLV EVOLV RLBI
Development External Internal
Maintenance External Internal
Scalable Across TCF
Yes No
Uses Reporting, Accounting, ALLL, DFAST, Forecasting, Loan Sales
Reporting
Vendor Primatics N/A
• Data Integrity and Controls Clear RCS Unsatisfactory rating Reduce financial reporting risk,
protect shareholder value
• Efficiency Gains Reduce compliance cycle time and
increase analytical capacity Primatics better positioned to
maintain system
• Enterprise Scalability Applicable across all lending units
• Loan Sale Structure Flexibility Participations and other structures
11
Opportunity
Rising. Q&A