Lenders anticipating an increase in small business loans may be rethinking their approach to loan servicing. Many lenders who built their own loan servicing systems or relied on the servicing capabilities provided by their core banking systems are now evaluating loan servicing solutions from specialist providers to more efficiently meet current needs. If you count yourself among that group, we offer four key capabilities to consider when evaluating your small business loan servicing options.
|What To Look For||Why You Need It|
|Multichannel Customer Care||Today’s business owners expect to interact with lenders via the channels most convenient at the moment.|
|Self-Servicing Portal||Gives business owners a 24/7 ability to manage their loans and reduces your call center load.|
|Real-Time Transaction Processing||Eliminates delays and inaccuracies associated with batch processing of transactions. Accounts always reflect current loan status.|
|Analytics||Essential to understanding the efficiency of your servicing operations and identifying opportunities for continued improvement.|
Want to find out more about our software and services? Contact our team today.
Multichannel Customer Care Is A Must
Although loan origination may be transacted entirely online, today’s loan servicing requires multichannel engagement. With multichannel customer care, business owners can initiate inquiries via phone, email, chat, text, and, occasionally, by post. Your small business loan servicing solution needs to handle all of these channels with equal ease.
All inquiries or in-bound correspondence should be managed via workflow routing that eliminates manual user handoff between departments and ensures prompt, competent resolution. Additionally, inbound and outbound communications, including any associated documents, should be recorded and linked to the business’s account to create a comprehensive history of borrower interactions.
Self-Servicing Portal Benefits Lender and Borrower
A self-servicing portal (desktop or mobile) allows business owners to make payments, review monthly statements, documents, and account balances, or manage loan details at any time. This can eliminate the need to print and mail monthly statements and reduce call center traffic by as much as 50%. Additionally, giving business owners the ability to manage simple loan activities on their own allows loan servicing agents to focus on inquiries that truly require their expertise.
Real-Time Transaction Processing Accurately Reflects Loan Status
Account accuracy and timeliness of recording transactions is critical to the quality of small business loan servicing. Your servicing solution should be able to import all of the necessary loan contract data into the system as soon as the loan has been funded to ensure that servicing agents have secure access to vital information.
Look for the ability to update accounts in real-time, eliminating the delays associated with overnight batch cycles in older servicing systems. This way, servicing agents always work with accurate information that reflects current balances and payments. Any reports generated also show accurate balances. And as account balances change, the general ledger chart of loan accounts will automatically map portfolio balances to your corporate general ledger for accurate reconciliation.
To more effectively respond to unexpected transactions (or absence of expected transactions), your loan servicing solution should also offer staff the ability to create alerts using configurable rules and parameters. With these alerts, servicing agents can proactively respond to changes in loan status that require immediate attention.
Analytics Provide Critical Insight
Any loan servicing solution will generate a large amount of data about customer interactions and loan transactions. To obtain the maximum value from these data, your small business loan servicing solution should include analytic capabilities that provide summary, as well as detailed, insight into loan servicing performance and trends. With intuitive analytics, lending professionals (no need for data scientists or database specialists) can analyze the efficiency of their servicing operations. Regularly-scheduled or ad-hoc reports can be used to:
- Monitor call center volume, response, and resolution times to determine if customer care performance metrics are being met;
- Identify developing trends and use that insight to adjust resources or modify lending strategy;
- Compare performance metrics for the week, month, quarter, and year against plan; and
- Uncover anomalies in loan servicing to diagnose and mitigate possible risk factors.
Considering the wealth of data available to lending professionals and the potential value of this information, analytics should be considered an essential part of the servicing solution. With analytics, lending professionals can get the fullest benefit from their investment.
Hosted Software As a Small Business Loan Servicing Solution
Despite the economic upheaval of the moment, now may be a prime time to invest in upgrading your loan servicing capabilities. As an alternative to replacing outdated software with new in-house solutions, many lenders are looking to cloud-hosted solutions to deliver the small business loan servicing capabilities they need.
A cloud-hosted solution allows you to avoid the hassle of on-site software implementation and customization. Instead, lenders can quickly realize the benefits of improved service efficiency, account accuracy, and the ability to obtain detailed insight into servicing activities. By upgrading your small business loan servicing capabilities via cloud hosting, you’ll be well equipped to address today’s needs and be well prepared for inevitable changes in the lending industry.
defi SOLUTIONS provides configurable loan origination systems, loan management, and servicing, analytics and reporting, and a wide range of technology-enabled BPO services. If you’re looking to improve your ability to service small business loans, take the first step in realizing the benefits of modern technology. Contact our team today or register for a demo.