The past year has highlighted the importance and value of loan servicing software that can quickly respond to unexpected changes in market conditions. Lenders have been inundated with inquiries regarding skipped payments, forbearance, refinancing, delinquencies, and defaults. Adding to the strain, employees have been trying to conduct business as usual while working remotely. These trying circumstances revealed inefficiencies in software, practices, policies, and corporate cultures that lenders want to avoid.
For many lenders, their loan servicing software is their Achilles heel as they attempt to cope with the influx of loan servicing demands. And as a result, many lenders are looking for better solutions to manage the spectrum of auto loan servicing demands.
Based on our interaction with our current and future clients across the U.S. and Canada, we’re seeing four specific digital lending trends developing in response to these requirements:
- Self-service apps to decrease servicing center demands.
- Support for remote employees across all loan servicing activities.
- Integration of specialized servicing information sources for improved efficiency.
- Analytics to better understand servicing trends and portfolio performance.
Together, these four digital lending trends work to improve the auto loan servicing process, creating streamlined workflows in which transactions can be handled with the utmost efficiency.
Self-Servicing Apps Give Borrowers More Control and Reduce Service Center Inquiries
Many loan servicing center inquiries can be eliminated when borrowers can securely access loan or lease information and manage transactions via well-designed desktop or mobile applications. Just as loan origination applications can provide a completely digital loan submission, the same technology can be applied to allow 24/7/52 servicing for the most common activities, including:
- Accessing account information, including loan or lease agreement and vehicle information.
- Updating contact information.
- Setting up automated payments.
- Confirming payments have been made.
- Reviewing payment history.
- Downloading and viewing payment statements and account summary information.
- Requesting current payoff amount.
- Sending a request to a servicing agent.
Providing borrowers the convenience of these capabilities gives them more control over the lending process and allows them to stay informed anytime, anywhere without bogging down the service center call lines.
Support Remote Workers in All Loan and Lease Servicing Activities
Last year, many lenders were severely challenged by the inability of their servicing software to fully support remote workers. Software wasn’t deployable or fully functional on home computers, document workflows across a remote workforce were anything but efficient, and response times often lagged.
In contrast, lenders running cloud-based loan servicing software were equipped to handle the increase in loan and lease servicing demands without major disruption. They were able to:
- Access the software via leading web browsers.
- Reconfigure the UI, policies, and processes rapidly without the need for programming.
- Manage lending documents digitally.
Whether business returns to normal or a remote workforce is the new normal, lenders will be looking for loan and lease servicing software that provides significantly greater flexibility in deployment, accessibility, and adaptability to changing market conditions.
Integration of Information Sources and Services for Greater Efficiency
A growing number of specialized servicing software applications can be easily integrated with cloud-based lending software. These services exceed any capabilities that lenders could cost-effectively develop and maintain on their own. They provide the most direct means to extend the native capabilities of the servicing software, bring greater efficiency to high-volume servicing transactions, and automate less frequent (but nonetheless complex) processes. Some of the most useful information sources and services available are:
| General Ledgers Tax Services Tolls & Citations Vehicle Valuations Title Management Vehicle Inspections | Online Bill Payments Email & SMS Notifications Statement Generation Repossessions Bankruptcies Deceased Monitoring |
Modern loan and lease servicing software solutions pre-integrate these resources to make it easier for lenders to quickly take advantage of their benefits. Lenders striving for greater servicing efficiency will look for opportunities to incorporate these information sources and services into their loan and lease software.
Integrated Analytics to Realize Maximum Value From Operational and Portfolio Data
The transactional nature of loan and lease servicing generates volumes of useful data. The best way to realize the value of that data is through integrated analytics that allows lending professionals to explore and evaluate servicing efficiency as well as portfolio performance.
Insight from operational data is vital in understanding historical and developing servicing trends that can guide staffing decisions. Analytics can answer questions such as:
- Which inquiries require the most time to resolve?
- How do call volumes correlate with the types of loans or leases?
- What additional capabilities could be included in the self-service application to further reduce call volumes?
Insight from portfolio data is vital in determining how credit policies are affecting performance. Analytics can identify developing risks that should be addressed early in the lending cycle, as well as potential growth opportunities.
Digital Lending Trends Focus on Flexibility
Last year’s stresses are forcing the lending industry to adopt innovative solutions that provide far more flexibility in how loan and lease servicing is delivered. Giving borrowers greater control over their accounts; providing servicing agents with the ability to be productive regardless of work location; increasing the efficiency and consistency of managing high-volume and complex servicing processes; and employing analytics to mine operational and portfolio data with the goal of finding new areas to enhance performance and profitability will be four of the top digital lending trends this year that you should seriously consider implementing.
Getting Started
defi SOLUTIONS provides configurable lease or loan originations and servicing systems that incorporate innovative technologies and the latest digital lending trends to bring greater efficiency to the entire lending cycle. If your current lending software is limiting your ability to meet the servicing demands of today’s market, take the first step in realizing the benefits of modern auto loan and lease servicing solutions. Contact our team today or register for a demo.
