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LOAN OUTSOURCING: BUSINESS PROCESS OPTIMIZATION FOR AUTO LENDERS

The defi Team Compliance, defi INSIGHT, Managed Servicing, Remarketing, Reporting & Analytics, Servicing Systems, Simplifying Processes, X-Business Process Outsourcing

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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 loan outsourcing business that focuses exclusively on the lending industry. 

An established loan outsourcing business 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 Loan Outsourcing Provides Auto Lenders With Business Process Optimization

TechnologyUse/Benefits
Decision Rules➨ Identify the right time to send a payment reminder based on account lease or loan information
➨ Check if the borrower’s collection process is regulated
➨ Find the best renewal offer for a borrower whose lease is up
Workflows➨ Prepare a welcome email for new borrowers with terms, payments, and resources to answer common questions
➨ Initiate a default management process that follows state and federal regulations
➨ Coordinate vehicle transportation, evaluation, and sale at lease end
Robotic Process Automation➨ Process bills between lessors and lessees in less than an hour
➨ Pay any outstanding tolls or fines associated with lease termination
➨ Update account info and general ledgers once payment is received
Analytics➨ Check that lease and loan servicing processes are running smoothly and that SLAs are being met
➨ Keep track of vehicle transportation costs and average transit times
➨ Decide which auction services consistently deliver higher vehicle values, use those more, and drop the rest
➨ Analyze call center volumes over time to determine trends and ensure adequate staffing

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 loan outsourcing businesses 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 ending.

Workflows Bring 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.  

RPA Coordinates 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 loan outsourcing business will have firsthand knowledge of 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 its business processes. A lending system that uses decision rules, workflows, and RPA 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 proactively prevent lease and loan problems that require significant amounts of time and professional skills to navigate and resolve. Predictive analytics employs artificial intelligence (AI) to identify accounts likely to default. For example, two consecutive late payments, partial payments, 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. 

Proactively managing potentially risky accounts can significantly reduce the time required to manage delinquent and defaulting borrowers. In this instance, business process optimization is achieved by proactively mitigating potential problems.

Loan Outsourcing: Business Process Optimization For Your Business

Loan outsourcing businesses can be the fastest route to business process optimization for auto lenders that may not have the financial resources to invest in the required technology and staff. The best loan outsourcing businesses 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 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.

Getting Started

defi SOLUTIONS is redefining the loan outsourcing business with end-to-end software solutions that enable lenders to automate, streamline, and deliver. Borrowers want a quick turnaround on their loan applications, and lenders want quick decisions that satisfy borrowers and hold up under scrutiny. With defi MANAGED SERVICING, lenders can improve operations and processes related to auto loan servicing, leases, and the disposition of leased vehicles, cutting expenses through automation and outsourcing services. For more information on what to look for when considering loan servicing companies and how we can help, Contact our team today and learn how our cloud-based loan origination products can transform your business.

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