Essay on Case Memo: Loan Processing at Capital One

1047 Words Feb 24th, 2011 5 Pages
Case memo: Loan Processing at Capital One

Executive summary Capital One was founded on the vision Richard Fairbank and Nigel Morris had regarding the potential profitability that could be made from customizing credit card products based. “Capital One now is one of the largest issuers of master card and visa credits in the world.” Recently, due to a new marketing campaign, Capital One predicts an increase in demand for fund loan approval. Based on the current levels of capacity, the loan department will not be able to accomplish their targeted goal of 700 applications per month. Our proposed plan is aimed at accomplishing a higher level of utilization and capacity through modifications on the current loan approval process. Since
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This improvement decreases the underwriter’s implied utilization to 1.08 from the original 1.33. At the same time it increases the work flow’s implied utilization to .78from zero. However, simply assigning file preparation to Q&A associates will actually increase the implied utilization to 1.29. So our group decided the best resolution is to hire an additional associate in Q&A step, thus lowering the implied utilization down to .86. Second, we plan to implement a training program to the interviewers, aiming at increasing information accuracy and completeness. The increase in information accuracy and completeness will in turn decrease the duration of the follow-up calls done by underwriters. Therefore, we hope to decrease the call duration minutes of follow-up calls from 11.6 to 9.1(2.5 minutes less). As a result, implied utilization will further decrease from 1.08 to 0.99. Third, our group identified inventory control as an important element of increasing the overall output rate. Better control over inventory inflow, it may decrease the overall duration of one process application. In order to do so, the delivery of mail to potential customers will be sent out according to the levels of inventory on hand. Rather than distributing a massive amount of applications to customers and process an unsteady amount of inflow, this method handles a constant stream of applications. Therefore, it

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