Today, the bank offers investment, trust, mortgage, physician lending, and equipment financing services through its national network of affiliates, bankers, trust officers, and mortgage advisors.
The Overview
In December 2019, a novel coronavirus that causes the potentially fatal respiratory illness COVID-19 was first identified in China. Before the spring, it would spread around the world and reach US shores. In March 2020, COVID-19 was declared a global pandemic by the World Health Organization. In response, state governments across the US imposed a quarantine, shutting down schools and non-essential businesses in an attempt to stem the spread of the virus.
This triggered the largest economic stimulus package in US history as the federal government responded to help small businesses retain employees and cover rent. On March 27, the CARES act was signed into law by President Donald Trump after enjoying bipartisan support in both chambers of Congress. The bill allotted $349 billion to help small businesses through the Paycheck Protection Program (PPP). The nation’s banks were to be on the front lines, so to speak, administering the distribution of funds. They had just seven days to prepare to accept loan applications.
The Challenge
With such a short window of time, Evolve Bank had to act fast to ensure its customers and community businesses received critical funds. With physical bank branches closed across the country due to the quarantine, the solution to such a challenge would have to be digital.
Scott Stafford, Evolve’s President and Chief Executive Officer, assembled a special team to implement a process to handle the surge of applications. “We knew we wanted to deliver best-in-class service to our customers during this difficult time,” said Mr. Stafford. “To do that, we needed to process these loans as fast as possible to get the funds to our customers who needed them most.”
Yet, Evolve faced obstacles. The bank did not have the right technology to digitally receive, verify, and process a large volume of loan applications while maintaining KYC/KYB and fraud controls. An end-to-end digital and automated account opening or loan application solution takes at least 30 days to set up, too long for the seven day time window the bank faced.
The Solution
Here’s where fintech firms Alloy and Middesk stepped up.
Tommy Nicholas, CEO of Alloy, knew his team needed “to meet bank customers where they were” in such exceptional times. Alloy’s Head of Data Science, Andrew Martin, suggested Evolve secure-send Excel spreadsheets of loan application data for Alloy to run through their system, verify identities, and screen for fraud.
Evolve jumped at the option to send batched spreadsheets of loan application data to Alloy. Alloy dedicated their data science team to the effort of vetting the spreadsheets. They ran each application through their system to run KYC/KYB checks, screen against sanctions lists, detect fraud, and verify relevant application data. They, in turn, partnered with business data verification company Middesk to ensure they had the information needed to vet not just LLC and C corporation applicants but sole proprietors as well.
Within seconds of running each batch, Middesk’s proprietary data pipelines delivered recent and complete information on every business. Middesk was uniquely qualified for the job due to the fact that it checks each business’s standing and verifies the accuracy of the information directly with all 50 Secretary of States.
Kyle Mack, CEO of Middesk, stated that he was “excited that Middesk could support small businesses across the US during this time, providing information to the end users who need to make fast, accurate decisions on how to best engage with each applicant.”
At first, it took Alloy as many as four hours to process a batch of applications for Evolve. But within two days, they had refined their process and slashed turnaround time to 30 minutes.
“It’s not every day that you get to lean in and help solve the crisis you see flashing across CNN. The stakes were incredibly high for so many businesses. We knew we needed to get creative and act fast to help Evolve and struggling small businesses,” said Alloy’s Mr. Nicholas.
The Results
Evolve processed loans for its customers and other small businesses before the $349 billion in government loans were exhausted just 14 days after applications were first accepted.
Many businesses learned from their banks that they would not be receiving government funding in this first wave of assistance.
With Alloy’s and Middesk’s support, Evolve Bank’s applicants were among the lucky ones.
Even beyond bank customers, Evolve was able to help all qualified applicants. A special education program, The Center for Learning Unlimited, inquired about the PPP and was turned away at 15 other banks. Evolve funded their loan within days. Program director Virginia Erxleben said, “You are an angel for our program for special kiddos who have no voice!”
