1. In my opinion, the bank organized this process mainly because it wants to maximize the utility of all departments. Every departments should try their best to do their job so that the bank will be in a good operation. In addition, this type of division of work will improve the proficiency of every department and improve the efficiency of this bank. The bank as a whole is composed by every department. It is a wise decision to divide everyone’s duty in order to improve the bank’s service level.
However, at the same time, this process does generate some problems. Firstly, departments focus on their job and duty rather than customers, which will make customers confused because no one is truly responsible for them. Then, the bank is a whole full of connections. Division of work will improve efficiency but will cut off the connections of departments in some extent.
2. In the previous process, many steps are overlapped. We should give providers and customers more options. The first key point is to judge whether this customer is in the bank’s data base records. If he is already in the database, we could eliminate the evaluation process, which will save many time for customers and reduce many workload for providers. To be sure, there are some steps essential for customers, for example, the final inspection of customers to make sure the previous loan is paid off in case for bad debt and reduce adverse selection for banks. In addition, the verification of income situation is necessary. Banks must secure that the customers have ability to payback the loan to prevent the moral hazard and adverse selections.
3. Indeed, there are some drawbacks in the refinancing process. My advice for improving is listed as followings.
a) The bank should assign some agents accountable for customers through the whole process. If there are some problems, customers could find agents to solve them. And, the bank could connect these agents’ salary with the amount of customers applying for loan successfully with their help. In this circumstance, agents are motivated to provide a better service for clients.
b) After the initial screening, agents should search for the customer’s information in their data base. Agents could ask customers if there is any information change. If the customer’s income situation has changed, they could update the data base records at the same time.
c) Banks have responsibility to tell customers the time every steps need and arrange every steps to ensure the evaluation and demonstration files are valid. If something is wrong because of the agents’ fault, the bank and agents must have responsibility to correct the mistake and bear the loss.
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