Even in a world not suffering from a pandemic and economic fallout, loan servicing can often be a challenge, requiring time, effort, and — to an increasing extent — analytical resources. And because of its importance to the entire lending process and its multifunctional nature, loan servicing, along with loan origination, is where most human errors occur.
In more trying circumstances — like those we face now, with the global health crisis straining economies amid a recession of uncertain duration and severity — the need for smooth and efficient loan servicing is even more acute.
“Lenders of different sizes and types see a need to modify existing loan terms to forestall defaults by consumers with reduced incomes and small businesses forced to shut down or operate on reduced hours in the pandemic,” says Dmitry Voronenko, CEO and Co-founder of TurnKey Lender, an AI-powered lending-platform solution. “And that’s without getting into the need to monitor, revise, and implement new compliance around government-backed stimulus in partnership with private-sector lenders.”
Further, lenders are themselves feeling pinched by a pandemic-fueled recession, adds Voronenko. As a result, they “need new efficiencies around their lending programs, and they need them now, whether main-street economies stay stagnant or start to rebound,” he says.
Altogether, this confluence of factors makes this a perfect time for lenders to re-examine their loan-servicing operations with a view to their immediate needs and their long-term planning.
Loan servicing is a definitional grab-bag that covers loan-administration functions from the second funds are dispersed to a borrower until the money is paid back in full. Specific functions under the “loan servicing” rubric include, at a minimum, sending payment statements, collecting payments, maintaining records of payments and balances, and following up on delinquencies.
Using TurnKey Lender’s service-as-a-software platform, effective loan-servicing starts with a modular software suite engineered to help lenders enjoy core benefits such as:
- Getting support for all loan and lender types.
- Reviewing and improving credit-risk strategies with help from detailed credit-decision analytics.
- Identifying your most profitable customers for improved portfolio yield.
- Reducing errors and optimizing business processes and achieving optimal loan-approval flows with best-in-class, AI-powered workflows.
- Achieving advanced credit scoring with an AI-optimized scoring template — whether its generic or customized for your specific criteria.
- Processing loans almost anywhere — including at the point of sale — with robust and secure mobile capabilities.
- Getting your white-label lending platform up and running quickly and fully customized, backed by round-the-clock IT and client-service support.
- Saving on operations and making more from your loan portfolio by using a platform whose modular architecture allows you to start with the basics and add functionality as needed — making TurnKey Lender cost-effective for more kinds and sizes of businesses that want to extend credit.
Further, in the present crisis, TurnKey Lender’s automation can help make sure the correct information around loan-term modification is shared, and that our analytics can provide extra oversight and ensure that terms and conditions conform to the prevailing regulatory regime.
When vetting it and other loan-servicing companies, TurnKey Lender recommends the following 10-step review process:
- Delineate short and long-term business needs.
- Decide whether a one-stop system matches, and the extent to which modularity is important.
- Check for smart automation and proprietary credit scoring
- Consider user-friendliness, ease of deployment, and how easy it is to learn to use.
- Make sure there are editions of the platform for the markets you wish to target.
- See if the system supports cloud-based and own-server hosting.
- Find out if mobile functionality can be part of the package as an aid to “lend from anywhere” capabilities.
- Probe the platform’s ease of business-logic customization
- Review the provider’s track record through reviews, awards and press releases.
- Be certain the provider offers comprehensive, integrated servicing functionality.
“At TurnKey Lender, we always welcome such scrutiny,” says Voronenko. “But maybe it’s easier to face competitors when you’ve got the attitude, as we do, that second best simply isn’t an option.”
Big picture, TurnKey Lender supports economic growth in all market conditions by enabling more businesses — traditional industry participants as well as new entrants — to participate as lenders on terms that add lasting value and unlock lucrative new markets. The platform highlights innovations around machine learning and artificial intelligence to build efficiencies and provide board-of-directors-grade reporting on the company’s lending activities. This holds true whether the aim in view is to boost retail sales, enable debt financing, speed grant processing, or empower comprehensive but user-friendly loan servicing.
Interested in learning more about loan servicing, loan modifications or anything else your lending business may be having an influx in demand with due to the current situation? Reach out today to schedule a call.