The right loan servicing platform can be your biggest competitive differentiator

Jeff Higdon

Winning and keeping the business of today’s consumer and auto loan borrowers means being able to meet them where they are — on the digital forefront. Recent stats show that Americans now take out 2.3 million new auto loans each month, collectively totaling $56 billion every 30 days. And while GenXers are currently financing more car purchases than any other age group, the new “it” generation is GenZ — born between 1996–2012. Along with Millennials, they’re the first generation to grow up in the internet age, and they’re driving new trends in vehicle purchases and lifecycles.

For consumer lenders and creditors, all of this presents exciting new opportunities to “be there” for today’s digitally savvy borrowers — offering a wider variety of lending products and backing them up with high-efficiency, digitally powered, personalized and responsive service.

Whether you’re a one-branch operation or have hundreds of locations in multiple regions, leveraging new digital interaction capabilities will help you enhance and tailor customer experiences, fuel productivity, reduce overhead, grow loan volumes, increase dollars collected and maximize profitability.

The confinements of a legacy mindset

Despite this digital age, it’s not uncommon for consumer lenders and creditors to be working on antiquated, complex systems that are cumbersome and expensive to run. These systems may have numerous capabilities, but are often difficult to learn, inefficient to operate and a barrier to both efficiency and customer satisfaction.

With many of these legacy systems, agents can only see part of the story relating to a customer's history or account. Managing a single account often involves navigating back and forth between servicing and collections environments, and a lot of time clicking through a labyrinth of screens to look up information, find collateral, search for data or complete a process or transaction. Lack of a broad view and transparency is a hindrance to productivity.

And yet, organizations stick with the cumbersome and complicated systems because they believe converting to a more modern environment will take a year or more, cost countless dollars and be disruptive to operations.

Fast-tracking digital readiness no longer has to be expensive or disruptive

Many lenders and servicers have been held back from digital transformation assuming it’s going to cost them millions to upgrade or be too disruptive to their operations. This is no longer the case with the newest generation of cloud-based solutions from top-tier providers.

The most versatile next-gen platforms now enable seamless, low or no-cost integration with existing systems or full functionality on their own. They turn traditional desktop-based systems into high-powered cloud-based environments for little or no conversion cost. The best-in-breed of these function through a private cloud/intranet that enables even higher levels of security.

For organizations who have been stuck in legacy mode, a next-gen platform is a game-changer. It means the ability to supercharge productivity with dynamic capabilities that can efficiently manage thousands of transactions and complex requirements. It means leaner IT, lower fixed costs, modern, digitally powered operations and a better experience for agents and customers. Whether servicing and collections teams are working with customers in the office, online or over the phone, a “future-ready” platform can reduce costs by 15-35%.

What to look for in a new loan servicing and collections platform:

Low or no-cost integration/implementation
Secure, cloud-based functionality (private cloud/intranet is the gold standard)
Real-time processing
Flexible, customizable
Open ecosystem for efficient handling large volumes and complex portfolios
One-click access to customer account information
Rapid search capabilities
Simple information updating
Easy-access transaction history and collateral information
Workflow automation
Comprehensive reporting for management
Built-in auto dialer controls
Reduced training and FTE requirements

Beyond evaluating the nuts-and-bolts digital functionality of the system and assessing the benefits it will bring, the partner who will deliver and implement the platform is critical. A top-tier provider will be able get your new solution up and running within months (not a year or years), with little or no up-front costs. They should also have deep expertise and resources to be able to handle all or some of your loan servicing and collections functions, which brings a host of additional advantages such as:

Access to scalable technology-driven teams, advanced service centers and the latest tools to drive performance
Eliminating the need for physical or virtual servers and infrastructure
Improving your ability to focus on business growth instead of managing and scaling technology

The benefits of updating, modernizing and leveraging digital capabilities in loan servicing and collections cannot be underestimated. The right platform (and partner) can be a big competitive advantage in your daily performance and help you spark digital transformation and business success across your enterprise.

Conduent is one of the nation’s largest application service providers for consumer loan and lease servicing systems, supporting more than 14 million consumer loans and leases and managing more than $120 billion in consumer loan assets — with a 25+-year track record as the engine behind major consumer lending companies. Conduent’s Loan Manager platform is digitally transforming loan and lease servicing and collections.