auto lending digital

WHEN CHOOSING A THIRD-PARTY BPO OR MANAGED SERVICING PROVIDER, LOOK FOR INDUSTRY EXPERIENCE

The defi Team Compliance, defi INSIGHT, Fraud, Managed Servicing, Reporting & Analytics, Simplifying Processes

auto lending digital

Business process outsourcing has been widely adopted across all industries, from the simple outsourcing of activities, such as accounts receivable, to the far more complex supply chain logistics and management. Outsourced managed servicing is unique to the lending industry. The prime reason for outsourcing any process is the belief that a third-party BPO or managed servicing provider can manage the activities better, faster, and cheaper than you can in-house. Companies have adopted third-party BPO or managed servicing to become more competitive, improve service quality, reduce operational costs, reduce risk, and overall, allow them to focus more intently on the core activities of their business. 

There are hundreds of BPO and few managed servicing providers that offer services. Some may provide a range of services that are applicable to many industries. Others, like managed servicing providers, differentiate their services by focusing on a specific industry or activity within that industry. For auto lenders, we believe you’ll be better off working with a third-party BPO or managed servicing provider that specializes in the industry. We explain the reasoning behind this belief in the following paragraphs.

Industry Experience Is Paramount 

You’ll always work more efficiently and effectively with someone who truly understands your business. A managed servicing provider that exclusively focuses on the auto lending industry tailors every aspect of their services to meet your unique needs. The managed servicing provider’s IT infrastructure and software are selected, implemented, and customized to meet the needs of auto lenders. Staff with real-life lending experience are hired and receive continual training to keep current with changes in the auto lending industry. From call center operations to remarketing, processes are designed and monitored to track performance and continually find ways to improve efficiency.

Systems Customized for the Needs of Auto Lending 

Unlike a third-party BPO provider, a managed servicing provider focusing on the auto lending industry will have systems customized to handle all aspects of lease and loan servicing, including call center, payment processing, cash management, title management, end of lease, defaults, repossessions, and vehicle remarketing. Third-party BPO or managed servicing providers with fully integrated systems provide smooth workflows and secure updating of borrower information throughout the servicing phase. Continual investments in the underlying technologies and automation that drive these systems ensure increased efficiency and the ability to meet changing demands associated with seasonality and economic conditions. The best third-party BPO or managed servicing providers implement recognized quality standards, such as ISO 9001, to ensure that they consistently provide their customers with the highest level of services.

Meet the Challenges of Federal and State Regulations 

If you’re challenged with the demands of an increasing number of federal and state regulations such as Servicemembers Civil Relief Act, Fair Debt Collections Practices Act, Electronic Funds Transfer Act, Telephone Consumer Protection Act, Consumer Leasing Act, or State Debt Collections, working with an experienced managed servicing provider can be the fastest way to ensure compliant practices. Experienced providers address compliance requirements in two ways. First, compliance controls are built into the servicing systems. Automation, driven by workflows and decision rules, help translate regulations into consistently executed activities and tasks. Second, employees receive extensive training regarding compliance practices and are retrained as regulations change.  

Improve Performance Through Analytics 

Third-party managed servicing providers that use analytics in their operations are well-positioned to continually improve the lease and loan servicing processes they provide. Few auto lenders have the ability to leverage analytics extensively throughout the lending cycle. A few examples highlight the benefits of a comprehensive approach to using analytics.

  • Analysis of call center activities can uncover nascent trends such as a segment of your portfolio requesting deferrals because of an unexpected downturn in a local economy, and allow you to quickly implement strategies to mitigate losses. 
  • Predictive analytics applied to a portfolio can indicate borrowers with a high probability of becoming delinquent. Based on that information, the managed servicing provider can then initiate a proactive campaign with these borrowers to educate them on options and prevent delinquencies. 
  • Monitor complex vehicle remarketing activities like taking possession of the vehicle, evaluating its condition, transporting it to an auction, and obtaining returns from the sale. Monitoring and reporting on these activities show how efficiently your inventory progresses through the process and where you are getting the maximum value for vehicles.

Suppose you work with a third-party managed servicing provider that understands the value of analytics. You’re not only gaining the benefit of lower cost and greater efficiency in the lease and loan servicing phase, you’ll also be able to deliver a higher quality of service that benefits borrowers and enhances your reputation. 

Which is right for you? A Third-Party BPO or Managed Servicing Provider

Rather than a third-party BPO provider that doesn’t understand lending, auto lenders will gain more from working with third-party managed servicing provider that specializes in lending. Systems specifically designed for lending, experienced lending professionals, an in-depth understanding of the complexities of lending regulations, and comprehensive analytics give auto lenders the ability to deliver a higher quality of lease and loan services. Choosing a third-party BPO or managed servicing provider can be the fastest route to improved efficiency and lower operating costs.

Getting Started

defi SOLUTIONS provides software solutions for all phases of the lending life cycle. We also provide a full complement of managed servicing outsourcing services, including call center, collections, lease management, and remarketing. With more than three decades of focusing on the auto lending industry, our software and services are tailored to the needs of regional banks, finance companies, credit unions, lending start-ups, captive lenders, and national banks.  Contact our team today to learn how we can help you choose a third-party BPO or managed servicing provider and improve your operations and lending performance.

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