Financial Services Company Cuts Loan Cycle Times and Trims Costs
Challenge
For consumers, it’s always a relief to get approved for a loan. Meanwhile, financial companies are just as happy to be approved to fund those loans. Borrowers typically apply to several funders simultaneously and may be inclined to accept the funder who approves them first. To succeed in this competitive market and win approvals, finance companies need to act fast.
Our client buys loan installment contracts from originators who finance consumers with inconsistent credit histories. The company has 10,000 loan origination partners who apply to fund 300 applications each day. It adds up to a large number of loans to process each day, and the company used a legacy process that slowed down its ability to quickly review and approve them. Each time a new loan contract arrived, a full business day passed before the loan reached an underwriter for review. Too often, the underwriter's approval was too late.
“The process was impeding the growth of our loan portfolio,” said an executive at the company. “You have to act fast to compete, and we weren’t. Even on a granular level, the process was holding us back because it ultimately wasted our underwriters’ time.” Also problematic: Customer statements were mailed late in the billing cycle, leading customers to be late with their payments. This lag in efficiency drove up both delinquent accounts and the company’s collection costs.
“We needed to be more efficient,” the executive said. “Canon Business Process Services helped us get there.”
Our Solution
After our process experts analyzed the finance company’s current document management workflows, we came up with a “wraparound” document process to logically connect front-end document intake with document scanning, file management, printing, and mail production functions—all with the help of technology solutions that make employees far more productive.
Productivity stems from the new process: Each day when loan applications arrive in the mail, our team uses new barcode technology to log the applications in an electronic system. After preparing the documents, the Canon team images them. This process includes indexing, capturing data, and managing the quality control so all information is 100% accurate. Instead of taking a full day to get to the underwriting team, each contract file now becomes available to funding by 1 pm.
“Canon’s new process meets our company’s needs and better prepares us for the future as the financial industry puts even greater emphasis on speed,” said the company executive. “The process cuts loan cycle time in half, automates the record-keeping process, and makes it quick and easy to retrieve files any time during the funding process, or later when they’re sold on the wholesale market.”
Building on the success of this project, we worked with the company to improve statement printing and distribution. First, we installed new high-speed printers and print management software to automate the statement-printing process. Then, we synced the company’s Central Reprographics Department (CRD) with the mail center so customer statements, disclosures, and other correspondences can be printed, inserted, sorted, metered, and placed in the mail stream in one easy process. As with the new loan application process, this new unified process greatly improves operational efficiency—and keeps customers happy by making it easier to pay bills on time.
Results
Time was the main focus of our engagement with the finance company. We found ways to cut the loan cycle time, improve employees’ use of their time at work, and help customers pay their bills on time. It was time well spent—in the first year, the greater efficiencies in print, copy, and mail processing cut costs by $100,000. With the new processes in place, the company expects to save even more as time goes on.