Executive Summary
For more than 175 years, Berkshire Bank, a division of Boston-based Beacon Bank & Trust, has been serving the financial needs of individuals, businesses, and institutions. Today, Berkshire is a $12 billion regional bank and a top 20 lender in the U.S. Small Business Administration (SBA) 7A loan program, which aims to improve access to financing for small businesses.
Since Berkshire began using Thomson Reuters Risk & Fraud Solutions for risk management in 2021, it’s seen a noteworthy reduction in financial and reputational risks thanks to enhanced speed and efficiency in its due diligence process, which in turn has enabled improved fraud prevention, more informed client and vendor onboarding decisions and faster lending decisions.
Berkshire uses the CLEAR platform for in-depth searches of public records, sanctions database, and media coverage; CLEAR ID Confirm to validate customer identities; and CLEAR Risk Inform to conduct high-risk subject analytics, alongside Westlaw from Thomson Reuters to check court records for bankruptcy information.
The challenges before the change
Before leveraging Thomson Reuters Risk & Fraud Solutions, Berkshire used several products and resources to identify clients, provide credit reports, and conduct searches. As a result, its processes were more fragmented and less efficient. The bank wanted a more streamlined, connected solution.
Why Thomson Reuters Risk & Fraud Solutions: Going with the global leader
Thomson Reuters Risk & Fraud Solutions cater to all of Berkshire’s needs efficiently in one place. Each component interoperates with the others, and they connect seamlessly with Westlaw and third-party systems such as the bank’s anti-money laundering (AML) tools. “It’s effectively a one-stop solution for preventing fraud and reputational risk,” said Scott Gillanders, Senior Vice President and Credit Director of Government Guaranteed Lending at 44 Business Capital, the national SBA lending division of Beacon Bank & Trust. “Since 44 Business Capital began using CLEAR, our division has been able to grow its loan volume without significant additions to our staff. It helps us make more informed decisions and delivers tremendous value in aggregating risk data.” Initially, the bank only used Thomson Reuters Risk & Fraud Solutions online legal research product Westlaw in its Legal Department. When Gillanders and his team started looking for a new risk management solution, they investigated what CLEAR offered and saw it could benefit several departments internally.
The market position of Thomson Reuters, as well as its ongoing investment in its solutions, was a critical selling point. “Thomson Reuters is a global leader, and to me, that carries weight in deciding who to work with and our confidence in the accuracy of its solutions,” Gillanders adds. “There are regular enhancements, such as the reverse phone number look-up functionality, that are helpful and make everything quicker.”
The bank has also benefitted from exceptional customer support from Thompson Reuters, including aiding in customizing its solutions to meet the bank’s needs and providing suggestions about tailoring the tools to its risk tolerance and benchmarking it against peers in the industry. “I’ve got to give a big shout out to the account support team,” says Gillanders. “They're always willing and able to answer questions about: How should we do this? How are others doing it? How do I solve this business problem? Having a dedicated account team, not just a customer service line, is extremely beneficial. That’s one of the reasons we chose Thomson Reuters. Some of our previous relationships were not holistic or proactive.”
Key uses
Berkshire Bank’s deposit teams rely on CLEAR to ensure compliance with the Bank Secrecy Act’s (BSA) AML requirements, to spot identification fraud and check whether a potential customer has a criminal past or appears on a sanctions list.
The bank’s commercial underwriting teams use CLEAR to analyze data from the bank’s loan origination systems to verify the information they have been given before approving applications for new products and services. It also helps determine whether the business conducts its affairs in accordance with the bank’s risk profile. For example, CLEAR Risk Inform will tell them whether the entity has any liens or judgements against it, appears on any sanctions lists, or whether the owners have a criminal record. This is also vital for due diligence requirements in SBA lending.
The bank’s third-party risk management team uses CLEAR during vendor onboarding to identify any potential issues with a supplier before entering a contract with them. “CLEAR provides us with information on an individual or business’ repayment history, business dealings, and other types of activity, and builds a picture of their character, which is vital when you’re doing judgement-based lending,” said Gillanders.
In some cases, the information it finds might mean the bank cannot do business with the entity, such as if they appear on Office of Foreign Assets Control lists. In most cases, it provides opportunities to dig deeper into the details or ask further questions to better understand a situation. Gillanders explains, “There are times when a business may have had a problem, but it’s explainable. For instance, problems caused by divorce, illness, or even natural disasters that may be remote in time or outside the control of the applicant. CLEAR gives us a basis on which to have a discussion to determine if this is an ongoing, clear and present risk to a lending decision, or if it is an outlier, and are there still good reasons to onboard the customer.”
Favorite features
One of the most helpful features in CLEAR that the bank leverages is its scoring functionality. This rates risk levels across issues, including bankruptcy, credit score, or liens and judgements in an easy-to-use dashboard. Scoring can be customized to align with the bank’s risk tolerances, ensuring a consistent approach to determining whether to proceed, investigate further, or stop the process, all within a universal risk framework. Staff can look at the score more closely on the CLEAR dashboard, where they can also find a range of other data analytics. Another popular feature is the ability to drill deeper into the details via embedded hyperlinks.
Gillanders particularly likes the Associate Analytics feature. He says, “I find the Associate Analytics component in CLEAR fascinating because you can start looking into people’s associates, business affiliations, or family members. The CLEAR report might reveal that they have undisclosed relationships or holdings or debt servicing issues that may not show up anywhere else, so you can ask about them.”
Post-implementation success
Thomson Reuters Risk & Fraud solutions save the bank time and money and allows the bank to gain vital insights into potential and existing customers, giving staff everything they need to make sound decisions, Gillanders says. In one example, the bank had legitimate suspicions about a minority shareholder in a business who was in the U.S. on a visa. The information contained in the CLEAR report run by the bank enabled it to ask the right questions to determine if there was any cause for concern, and ultimately to allay its fears.
“On a daily basis, we can save anything from minutes to hours in the data search and analysis process,” he says. “CLEAR gives you direction on where to spend your energy and focus your attention. CLEAR easily pays for itself by helping us manage financial, reputational and regulatory compliance risk. CLEAR’s advantage is that it puts everything we need right at our fingertips.”
