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Solving the issue of customer data intake in loan servicing

Solving the issue of customer data intake in loan servicing | EasySend blog
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7 minutes

Loan servicing is a critical part of the financial industry, but it relies heavily on manual workflows. Every time a customer wants to update their information, revise their repayment schedule or modify their loan in any way,  loan servicers have to go through a complex and often lengthy process of manually updating customer information, making repayment schedule revisions, and loan modifications.This can create inefficiencies and errors that can be costly for both lenders and borrowers.

[.emph]Loan servicing relies heavily on manual data entry, which can often lead to errors and inefficiencies. One way to solve this problem is through digital data intake.[.emph]

Digital data intake can help alleviate some of the burdens of loan servicing.  This would allow customers to update their information through an online portal, which would then be automatically updated in the loan servicing software.

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Manual workflows in loan servicing

Call centers are often the first point of contact for customers who want to make changes to their loans. 

Consider a typical loan modification request - the process typically goes something like this:

  1. The customer calls the call center and speaks to a customer service representative (CSR).
  2. The CSR collects all of the customer's information, including their name, account number, and details about the changes they want to make.
  3. The CSR then enters all of this information into the loan servicing software.
  4. Once the information is entered, a loan servicing specialist reviews the changes and either approves or denies them.
  5. If there is an error in the information,  or a missing signature or a document,  the loan specialist will have to contact the customer to resolve the issue, and the process starts all over again.

This manual process is time-consuming, error-prone, and expensive. If even one of these steps is done incorrectly, it can delay the loan modification process and cause frustration for both the borrower and the lender. It can also lead to costly mistakes, such as overcharging the borrower or missing a payment. It can also be frustrating for customers who just want to make a simple change to their loan.

[.emph]When it comes to loan servicing, the primary mode of data collection is often through call centers,  which are expensive to operate.[.emph]

The real problem with loan servicing

The inefficiencies in loan servicing don't just cause headaches for customers and call center representatives. They can also be costly for lenders. Several KPIs are negatively affected by manual data intake: 

  • Customer satisfaction: If customers have to wait on hold for a long time or are repeatedly transferred to different departments, they're likely to get frustrated and take their business elsewhere.
  • First contact resolution: If CSRs can't resolve customer issues quickly and easily, they'll be less likely to stay on the phone and more likely to transfer the call to someone else.
  • Cycle time: The longer it takes to collect and enter customer information, the longer it will take to service the loan.
  • Data integrity: If even one piece of information is entered incorrectly, it can cause major problems down the line.
  • Operational costs: Call centers are expensive to operate, and the more calls they have to handle, the higher their costs will be.

The advantages of digital data intake

Digital data intake is a process of collecting customer information electronically, typically through an online form or an interactive online interface. Digital data intake can help to improve the loan servicing process in a number of ways:

  • It's more accurate, as data is validated in real-time at the point of entry.
  • It allows customers to make changes to their loans on their own, without having to go through a call center.
  • It's more efficient, as digital data is automatically entered into the loan servicing software.

Offloading your call centers

With digital data intake,  customers can update their information through an online portal. The information is then automatically updated in the loan servicing software, without the need for manual intervention. This can help to reduce the burden on your call center, as well as improve customer satisfaction.

Digital data intake can also help you to collect customer data more efficiently.  When customers fill out an online form with real-time validation,  you can be sure that all of the information is accurate and complete.

This helps to reduce the number of errors in loan servicing and can save you time and money in the long run.  Here are three main  benefits of digital data intake:

Unifying siloed data sources

Another big issue with loan servicing is that data is often spread out across multiple siloed sources. This makes it difficult to get a complete picture of the customer and their loan.

Oftentimes, servicers have to go through multiple software systems just to find all of the information they need on a single loan. This is not only time-consuming, but it also increases the chances of errors.

Digital data intake can help alleviate these issues by unifying siloed data sources into a single platform. This gives servicers a complete view of the customer and their loan, making it easier to make changes and avoid errors.

Improving customer satisfaction

The digital world is moving at a fast pace, and customers expect their loan servicers to keep up.

They want to be able to make changes to their loans quickly and easily, without having to wait on hold for a customer service representative.

Digital data intake can help improve customer satisfaction by making it easier for them to make changes to their loans. This can be done through a self-service portal or an automated process that doesn't require human intervention.

Benefits of digital data intake for loan servicing

There are many benefits of digital data intake for loan servicing. Some of the most important are:

  • Quick and easy data collection: Digital data intake allows loan servicers to quickly and easily collect customer information.
  • Easy customer updates: Customers can easily update their information whenever they want to make a change to their loan.
  • Increased accuracy: Digital data intake increases the accuracy of customer information.
  • Improved customer service: Digital data intake can help improve customer service by allowing loan servicers to quickly and easily collect and update customer information.

How to select a digital data intake solution

When deciding to digitize customer data intake, organizations have three choices: build a digital data intake solution from scratch, outsource the development to a third party, or use no-code platforms.

Each option has its own set of pros and cons, but ultimately it comes down to what makes the most sense for your organization.

Building a digital data intake solution from scratch

Building a digital data intake solution from scratch can be a good option if you have the resources and expertise to do so. This option gives you complete control over the digital data intake process and allows you to tailor the solution to your specific needs.

The main downside of this option is that it is time-consuming and expensive. You'll need to invest in resources, including developers, to create and maintain the digital data intake solution. Also, such development projects usually take a long time,  which could delay the rollout of your digital data intake solution.

Outsourcing the development to a third party

Outsourcing the digital data intake development process to a third party can be a good option if you have the budget to do so.

When you outsource digital data intake development, you'll need to select a digital data intake partner that has experience developing such solutions. This will ensure that the digital data intake solution is developed properly and meets your specific needs.

The main downside of this option is that you'll have less control over the digital data intake process, and since outsourced solutions are also developed from scratch,  you can expect a long development time.

Using no-code platforms

No-code digital data intake platforms offer a middle ground between building a solution from scratch and outsourcing the development to a third party.

When you use a no-code digital data intake platform, you'll be able to tailor the digital data intake solution to your specific needs without having to invest in resources or wait for a long development time.

Agility is the main advantage,  as you'll be able to quickly deploy a digital data intake solution that meets your specific needs.

The main downside of this option is that you'll have fewer customization options since the no-code platforms rely on pre-built modules and templates. However, when you select your no-code platform carefully, this downside can be minimized.

Digital Data Intake for Loan Servicing - The Bottom Line

Digital data intake is the essential first step for automating tasks downstream such as customer information updates, revising repayment schedules, and even modifying loans without the need for manual input.

Digital data intake is the wave of the future, and it's time for loan servicers to catch up. The benefits of digital data intake are too great to ignore, and with the right solution in place, digital data intake can be a game-changer for loan servicers.

When selecting a digital data intake solution, consider what will work best for your organization. If you have the resources and expertise to build a digital data intake solution from scratch and don't mind waiting many months for deployment, this can be a good option. However, if you want to get up and running quickly,  using a no-code digital data intake platform is your best bet.

Vera Smirnoff
Vera Smirnoff

Vera Smirnoff is the demand generation manager at EasySend. She covers digital transformation in insurance and banking and the latest trends in InsurTech and digital customer experience.