Every auto lender strives for greater efficiency and lower operating costs. Throughout the lending cycle, there are dozens of opportunities to find better ways to accomplish a task, activity, or process. Essential to any process optimization today are technologies that eliminate manual processes, make decisions in a fraction of a second, ensure consistent procedure or process execution, and use analytics to measure and monitor efficiency continuously.
With the right technology investments, any auto lender can pursue business process optimization. However, for many auto lenders, the investments can be significant in both time and money. A better approach is to take advantage of the business process optimization capabilities of a business process outsourcing (BPO) provider that focuses exclusively on the lending industry.
An established BPO provider facilitates business process optimization using extensive automation and analytics. Let’s look at a few examples of business process optimization applied to the lending cycle’s lease and loan servicing phase.
How Automation Facilitates Business Process Optimization
You can’t achieve business process optimization without automation. Decision rules, workflows, and robotic processes are the building blocks of automation. Decision rules translate policies into code that compares or evaluates borrower and account data, determining the next step in the process. Workflows define the overall process, step by step, required to achieve an outcome or produce a result. Workflows often use decision rules to determine the next step in the process. Robotic process automation (RPA) uses configured scripts (“bots”) to orchestrate applications to manipulate structured data, process a transaction, initiate a response, or communicate with other digital systems. RPA is often employed to assist knowledge workers in carrying out tasks that would otherwise be time-consuming and cumbersome.
The best BPO providers apply these capabilities to achieve business process optimization throughout the lease and loan servicing phase. Some examples of how these technologies are applied include:
Decision Rules Are Used to:
- Evaluate account lease or loan information to determine when to initiate a payment reminder.
- Determine if the borrower is subject to any regulations regarding collections processing.
- Decide which renewal offers best suit a borrower whose lease is coming to an end.
Workflows Bringing Speed and Consistency to Common Activities Such As:
- Preparing a welcoming email for new borrowers, including specific information regarding terms, payments, and resources to answer common questions regarding leases and loans.
- Initiating a default management process that follows relevant federal and state regulations.
- Coordinating vehicle transportation, evaluation, and sale at the end of a lease.
Robotic Process Automation Coordinating Activities Involving Lending Professionals and Systems to:
- Reduce the time required to process bills between lessors and lessees from three and a half days to less than an hour.
- Calculate and pay outstanding tolls or fines associated with lease termination.
- Update account information and general ledgers as soon as payments have been received and recorded.
The opportunities to automate lease and loan servicing activities are numerous. An experienced BPO provider who specializes in lending will have firsthand knowledge in applying the right automation technologies and techniques to the complex activities involved in lease and loan servicing.
How Analytics Facilitates Business Process Optimization
Analytics is also essential in helping a lender optimize their business processes. A lending system that uses decision rules, workflows, and robotic process automation to support lease and loan servicing generates significant volumes of performance data. When these data are regularly analyzed, they can:
- Confirm that lease and loan servicing processes are running smoothly and meeting service level agreements (SLAs).
- Monitor vehicle transportation expenses and average transit times to auctions.
- Identify the auction services that consistently deliver higher vehicle values, increase the usage of those services and drop lower-performing auction services.
- Categorize and analyze call center volumes over time to determine trends and ensure adequate staffing throughout changing economic conditions.
Analytics can also be used to proactively prevent lease and loan problems that require significant amounts of time and professional skills to navigate and resolve. Predictive analytics employs artificial intelligence to identify accounts likely to default. For example, two consecutive late payments, partial payment, or other variations could indicate financial difficulties. Once identified, a workflow is then initiated to contact the borrower using the most effective channel(s) and advise them regarding mitigation strategies.
Proactive management of potentially risky accounts can significantly reduce the amount of time required to manage delinquent and defaulting borrowers. In this instance, business process optimization is achieved by proactively mitigating potential problems.
BPO Delivers Business Process Optimization
BPO providers can be the fastest route to business process optimization for auto lenders who may not have the financial resources to invest in the required technology and staff. The best BPO providers offer a range of services to help optimize vital servicing functions—call center, payment processing, lease maturity management, collections, and remarketing. They’ll work with you to determine the services that best meet your individual requirements, develop a detailed plan to successfully make the transition, and allow you to realize the benefits of business process optimization as quickly as possible.
defi SOLUTIONS provides BPO services to help auto lenders realize the benefits of business process optimization without making significant investments in technology, infrastructure, and staffing. defi Solutions offers a full servicing center staffed by experienced lending professionals who can meet the servicing demands of your growing business and strengthen your brand. We’d welcome the opportunity to discuss your specific BPO requirements. Contact our team today.