Lending institutions looking for more efficient ways to manage auto loan servicing and portfolio management are beginning to outsource some or all of these activities that they currently handle in-house. The outsourced activities can include call center operations, payment processing, lease maturity management, as well as handling the complexities of defaults and bankruptcies that negatively impact portfolio performance.
What’s motivating these lenders to move to outsourcing? One, they want to be more responsive to rapid changes in economic conditions. Two, they want to reduce servicing costs. Three, they either don’t have the resources to invest in the technologies and staff to deliver the level of servicing that today’s borrowers expect or they are choosing to rely on the expertise of trusted providers.
|Benefits of Working With an Experienced Auto Loan Servicing Provider|
|1. Depth and breadth of servicing expertise and experience|
2. Multilingual call center support for diverse borrower communities
3. Timely communications across all channels—phone, mail, email, webchat, and text
4. Extended support hours, including evenings, weekends, and holidays
5. Automation to efficiently handle high-volume and complex back-office processes
6. Compliance maintenance with federal and state lending regulations
7. Flexibility in offering a range of services allows lenders to make the transition to outsourcing at a pace that meets their unique needs
The lenders that are making the move to outsourcing are finding that better quality and efficiency of service are available at a lower cost. Here’s how auto loan servicing and portfolio management providers are helping lenders realize these benefits.
Depth and Breadth of Expertise and Experience for Better Portfolio Management
An established lease and loan portfolio servicing provider offers a breadth and depth of experience that most lenders can’t provide in-house. They easily handle the common questions that borrowers ask about payments. They’re also skilled in managing the most difficult servicing issues such as sudden loss of ability to pay stemming from unemployment or illness, bankruptcies, or identifying potential fraud before it impacts your portfolio.
If your loan portfolio reflects the increasing diversity of this country, an outsourcing provider can deliver a significantly better level of service by communicating with borrowers in their native language when they contact you by phone, email, or text. Communications in a borrower’s native language can help keep payments current and avoid complications that can have a negative impact on the loan portfolio.
A well-established outsourcing provider has the staffing resources and tools needed for better portfolio management. Many providers use predictive analytic tools to identify borrowers most likely to have problems making payments. By reaching out to borrowers before any indications of financial stress arise and advising on the methods or options to remain current, an outsourcing provider can have a positive impact on loan portfolio health.
Expanded Support Hours and Channels
Smaller lending institutions and larger institutions are often limited in the number of days and hours they can provide customer support. An established lease and loan servicing provider with nationwide coverage can offer extended call center support hours. That could be earlier or later hours during the workweek as well as weekends and holidays if needed.
And as the number of communication channels increases—phone, post, email, webchat, and text—support can also cover those channels to provide comprehensive communications with borrowers.
Greater Efficiency in Back Office Processes
The lease and loan servicing phase of the lending cycle is far more transaction-intensive than originations and here’s an area where experienced outsourcing providers excel. By investing in the latest technology and continuously looking for ways to improve process efficiency, they can handle high-volume transactions far more effectively than an in-house servicing organization.
- Handling payments via ACH or lockbox
- Cash management and accounting
- End of lease or end of term processes
- Handling off-lease vehicles
They’re also experienced in handling the more complex and less desirable aspects of lending, namely, counseling borrowers who have fallen behind in payments, bankruptcies, default collections, repossessions, and asset recoveries.
And as economic cycles wax and wane, an experienced outsourcing provider can easily adjust to the changing demands. Technology and automation make it much easier to handle increased demands or scale down without the need of hiring additional staff or laying them off when servicing volumes decline.
Greater Process Efficiency, Fewer Compliance Headaches
Compliance is a critical aspect of good portfolio management. Unfortunately, compliance is an area that has challenged most lenders, especially those who operate in multiple states. The technology, systems, professional staff, and best practices provided by an experienced outsourcing organization can ease the headaches of complying with numerous and evolving federal and state lending regulations. When you work with a competent lease and loan servicing provider, you not only gain a better level of process efficiency, you also gain confidence that you’re compliant with current lending regulations.
Auto Loan Servicing and Portfolio Management at Your Pace
For many lenders, the fastest way to optimize lease and loan servicing is to transfer those responsibilities to an established auto loan servicing and portfolio management provider. It doesn’t have to be an all-or-nothing leap into outsourcing. The best outsourcing providers will work with you to determine which services make the most sense to outsource. Based on a successful transition, you can then expand to additional services.
Lenders can achieve optimized auto loan servicing and portfolio management by working with a well-established outsourcing provider who offers innovative technology, experienced servicing agents, and best practices that focus on efficiency and compliance. Look for an outsourcing provider that has decades of experience, national coverage, and offers options that allow you to determine when and how you make your transition to the level of servicing and portfolio management that matches your needs.
defi SOLUTIONS is a leading provider of auto lease and loan servicing and portfolio management outsourcing, as well as configurable software solutions for lease and loan originations, servicing, analytics and reporting. If you’re struggling with the limitations of your managing lease and loan servicing in-house, take the first step in realizing the benefits of working with an experienced outsourcing provider. Contact our team today or register for a demo.