The hidden relationship between administrative work, capacity and growth
Ask a bank or credit union how it plans to grow its lending book, and the conversation usually turns to familiar things: customer and member growth, market opportunity, risk appetite, capital, pricing, products, relationship managers.
All important. But there’s another constraint that gets far less attention: how much operational work does every additional loan create?
This matters particularly in commercial lending. Ontario’s credit-union sector alone now holds more than $105 billion in assets, according to FSRA’s latest sector data, with approximately $27.5 billion in commercial loans. Commercial lending is a substantial part of the credit-union balance sheet. But growth brings more than additional assets.
It means more applications to process. More documents to collect. More financials to review. More approvals to coordinate. More conditions to satisfy. More exceptions to manage. More annual reviews to complete. More covenants to monitor.
And the expectation isn’t simply that credit unions do more of this work. It’s that they do it with appropriate controls, oversight, monitoring and governance.
So perhaps the real commercial-lending challenge isn’t simply growth. It’s growth, capacity and control:
- Can you grow the lending book without administrative workload growing at the same rate?
- Can you create capacity without weakening the controls surrounding credit decisions?
- Can you speed up the process without removing the human judgment that makes relationship-based lending valuable in the first place?
That’s where the conversation about lending modernization becomes much more interesting.
How much of a lender’s day is actually spent lending?
The industry benchmarks here are striking.
McKinsey estimates that relationship managers, underwriters, and portfolio managers in commercial banking can spend 40% or more of their time on non-core administrative, repetitive, and automatable tasks. More recent McKinsey research suggests that, at many commercial banks, relationship managers spend only 25 to 30% of their time in actual client dialogue. BCG has reported the other side of the same equation: commercial relationship managers can spend up to 60% of their time on internally facing administrative activities, including gathering information from multiple sources and managing internal requirements.
These aren’t Canadian credit-union-specific figures, and every institution is different. But the question they raise is highly relevant to any relationship-driven financial institution: how much of a lender’s day is actually spent lending?
Consider the lifecycle of a commercial credit relationship:
Origination → Documentation → Analysis → Adjudication → Conditions → Funding → Monitoring → Annual Review → Renewal
The credit decision itself is only one part of that journey. Surrounding it is an enormous amount of coordination: financial statements arrive, documents need to be collected and checked, information moves between systems, approvals move between people, conditions need tracking, exceptions require review, annual financials have to be requested, covenants need monitoring, and credit files need to stay complete and defensible.
None of these activities is difficult in isolation. Collectively, they consume capacity.
And that matters, because the most valuable use of an experienced lender’s time probably isn’t gathering information, chasing documents, updating spreadsheets or checking whether something has been approved. It’s talking to members. Understanding their businesses. Structuring credit. Assessing risk. Making judgments. Building relationships.
Those are the high-value activities. And they’re exactly the ones we shouldn’t be trying to automate away. The opportunity is to remove more of the administrative work surrounding them.
Growth creates an operating-leverage question
An interesting parallel appears elsewhere in the Canadian credit-union sector.
Deloitte’s analysis of the ongoing consolidation of Canadian credit unions points to scale and efficiency as important drivers of stronger performance. Total assets across Canada’s credit-union system doubled between 2014 and 2023, even as consolidation reduced the number of institutions. By mid-2023, the 25 largest Canadian credit unions represented approximately 76% of total system assets.
That analysis has an important nuance. Significant headcount reductions are relatively uncommon following credit-union mergers. Instead, institutions often enter combinations with unfilled positions, and greater efficiency reduces the amount of additional hiring required as the organization grows.
So efficiency doesn’t have to mean doing the same amount of work with fewer people. It can mean doing more valuable work with the people you already have.
That leads to a defining question for lending leaders: if the lending book grew 20%, would the operational effort required to support it also grow 20%?
If the answer is yes, growth eventually becomes dependent on adding people. If the answer can become no, you begin to create operating leverage.
Follow the loan, not the system
When organizations think about lending modernization, they tend to start with technology. Do we need a new loan origination system? A new CRM? A new document platform? A new AI tool?
Sometimes the answer is yes. But there’s another place to start: follow a loan from beginning to end.
Where does it wait? Where does someone have to chase something? Where is information copied from one system into another? Where does email become part of the process? Where does an experienced lender perform administrative work simply because nobody, and nothing, else is coordinating it? Where does the process leave the system entirely?
Those moments matter, because lending cycle time isn’t only the time people spend working on a loan. Often, it’s the time the loan spends waiting between steps.
That reframes the whole conversation. Instead of asking “which system should we replace?”, we can ask “which parts of the lending lifecycle are consuming capacity?”
The happy path is rarely the hard part
A straightforward application with complete documentation, clean financials and a decision comfortably within policy may already move reasonably well.
The more revealing question is what happens when the loan doesn’t follow the happy path. A document is missing. The structure falls outside policy. Additional security is required. An approval needs to move up the delegated-authority chain. A condition needs to be satisfied before funding. A covenant is breached. An annual review identifies deterioration.
Suddenly, a well-structured digital process turns into email, spreadsheets, shared drives, phone calls and conversations between experienced employees. That’s where operational capacity, efficiency and member experience can disappear remarkably quickly. It’s also where control becomes critical.
FSRA’s commercial-lending guidance emphasizes appropriate processes around underwriting, annual reviews, monitoring, reporting, approvals and breaches. It also explicitly discusses integrating technology and processes to streamline the administration, control and oversight of commercial lending.
That combination matters. Efficiency and control aren’t competing objectives. Done properly, the same workflow modernization that makes a process faster also makes it easier to see who owns something, what decision was made, what authority was applied, what remains outstanding and what evidence exists. That value only grows as the portfolio expands.
What happens when you redesign the work?
Evidence suggests the opportunity can be material.
BCG’s recent work on corporate lending suggests banks can achieve efficiency improvements of up to 30% through measures including process standardization, risk-based fast lanes, simplified administrative activities and organizational changes.
McKinsey has documented an SME lending transformation where relationship managers had previously navigated as many as 50 screens during the credit process, repeatedly entering information the bank already possessed. After the workflow was redesigned and digitized, that dropped to five screens. Cost per origination fell by 30 to 40%, and average processing from application to sanction-in-principle moved from days to minutes. A separate McKinsey analysis found redesigned SME underwriting could reduce “time to yes” by around 50%.
These are industry examples, not promises that every institution will see the same results. But they illustrate an important point: workflow modernization isn’t simply about making jobs easier. It can fundamentally change the amount of operational effort required to originate and manage credit.
From more automation to more capacity
So what might operating leverage actually look like inside a credit union? Not necessarily replacing the lending platform, and certainly not automating every credit decision. It can be far more practical:
- Documents requested automatically
- Information moved between systems without rekeying
- Applications routed according to established rules
- Approvals triggered based on delegated authority
- Conditions tracked proactively
- Exceptions surfaced to the right person
- Annual reviews initiated before they become overdue
- Financial information prepared before the lender opens the file
- Covenant changes highlighted for review
- Portfolio information made visible without someone assembling another spreadsheet
- AI used to extract, compare and summarize information, while the credit judgment stays firmly with the lender
Individually, none of these sound transformational. Collectively, they change the economics of the workflow. Portfolio growth no longer has to produce proportional growth in operational effort.
That’s what makes lending modernization interesting. Not simply digitizing an existing process. Creating capacity.
AI has a role, but it isn’t the whole story
In my last article, I wrote about the gap between using AI for personal productivity and embedding it into core banking operations. Commercial lending is a perfect example.
AI can extract information from financial statements, compare documents, summarize a credit file, identify changes between reporting periods, prepare material for an annual review and surface something requiring attention. Useful capabilities, all of them.
But someone still has to know when the financials are due. Something has to obtain them, connect them to the correct credit relationship, determine what happens next, route an exception and preserve the evidence. And ultimately, someone still has to exercise credit judgment.
That’s consistent with what the Bank of Canada is seeing across the sector. Its 2026 Financial System Survey found institutions primarily using AI to make existing tasks faster, while respondents generally did not see AI replacing human judgment in critical decisions. That feels particularly relevant to lending.
The opportunity isn’t to automate the lender. It’s to remove more of the work preventing the lender from lending.
Growth, capacity and control
Financial institutions are being asked to become more efficient and technologically capable while maintaining strong governance, prudent risk management and operational resilience.
For credit unions, there’s an added consideration. Their competitive advantage has rarely been scale. Their value lies in relationship banking: knowledge of members, knowledge of communities, and, in commercial banking particularly, knowledge of the businesses they serve.
That makes skilled lending capacity incredibly valuable. So lending modernization in credit unions needs to accomplish three things at once:
- Growth: the ability to originate, manage and monitor a larger portfolio.
- Capacity: less administrative effort for every incremental loan.
- Control: ensuring speed and scale don’t come at the expense of governance, risk management, or human judgment.
The interesting part is that these objectives don’t have to conflict. A well-designed lending operation can improve all three.
Perhaps the capacity is already there
Credit unions already have something valuable: experienced people who understand their members, their businesses and their communities. The question is how much of that expertise is being consumed by work that doesn’t require it.
So if I were sitting down with a lending team looking to grow its portfolio, my first question wouldn’t be “how do we originate more loans?” It would be “what is consuming the capacity of the people you already have?”
Follow the loan. Find the waiting. Find the chasing. Find the duplicate entry. Find the handoffs. Find the exceptions. Find the work happening outside the systems you’ve already invested in.
Because sometimes the capacity required to grow the lending book doesn’t need to be hired. It needs to be released.
Sources and further reading
Financial Services Regulatory Authority of Ontario (FSRA): Commercial Lending Guidance and Ontario Credit Union Sector Outlook. Commercial-lending scale, portfolio-management expectations, administration, monitoring, control and oversight.
Deloitte Canada: Resilience Through Credit Union Consolidation. Consolidation, asset growth, scale, efficiency, technology investment and staffing dynamics.
McKinsey & Company: Commercial Banking, SME Lending and Frontline Productivity research. Administrative workload, relationship-manager client time, SME underwriting, origination cost and processing-time improvements.
Boston Consulting Group: Commercial and Corporate Lending research. Relationship-manager productivity and efficiency improvements through lending-process redesign.
EY Canada: Boosting Productivity in Canadian Banks. SME banking productivity, automation, onboarding, document preparation and credit-writing processes.
Bank of Canada: Financial System Survey Highlights 2026. AI adoption, workflow integration, efficiency and the continuing importance of human judgment.
Author Profile:
Moray Hickes is an Enterprise Technology Solutions leader with over two decades of experience helping organizations navigate complex technology systems and deliver high-value solutions across regulated industries.