Industry

Why Now is the Time to Bring Control Over Your Borrower Communications Back In-house

BY Patrick Kehoe

At a time when all eyes are on rising interest rates, modernizing servicing communications processes might seem like it can continue to be punted to some future time. However, the downstream benefits of addressing the ongoing inefficiencies associated with creating and updating borrower communications are significant and enable servicers to be more agile in times when quick action is required.

Borrower communications operations still largely rely on legacy systems and manual processes and, as a result, are slow, cumbersome, costly, and inefficient despite the availability of alternatives. In a recent MBA webinar, when more than 150 attendees were asked, “what do you see as your biggest challenge with borrower communications?” the top two answers were, “the length of time it takes to create and update communications” as selected by 39% and “the process is very manual” as selected by 33% of the audience. The industry’s intense regulatory environment and thin margins have created barriers to modernization in the past, but the days of “if it’s not broken, don’t fix it” are long gone. Mortgage servicers are increasingly under pressure from consumers, new school digital-first competitors, and their own bottom line to transform the way they manage communications.

While print service vendors maintain that they can create and deliver customer communications less expensively and more efficiently than a mortgage servicer can do so internally, that is no longer the case.

Today’s communications systems make it possible for mortgage servicers to take back control with business users at the helm over the authoring and management process through the point of sending it to the printer or digital systems that deliver or mail the communication. This gives servicers the opportunity to lower costs, reduce operational risk, and set up for a thriving digital future.

Here are four solid reasons to consider taking internal control of your borrower communications:

1) You can work to your schedule, saving time and ensuring compliance

Being almost entirely reliant on third-party service providers can mean you are waiting in line for them to do the work to get borrower communications ready and sent to clients. Minimum turnaround times for simple jobs are often two weeks at best and can run into time frames of up to six weeks. Not only do mortgage teams have to wait for stakeholder approval for in-house draft creation, but they also must wait for the outsourced provider to schedule, code, and test the draft, then return a proof for final authorization. The evitable changes or tweaks to content extend the process further. If a change in regulations requires the need to create and send borrower communications during this waiting time, the challenge escalates.

Conversely, managing communications in-house using no-code SaaS solutions enables business teams to accelerate and control the entire process, from creation to proofing to testing. By leveraging an approach that empowers internal teams with control over content, rules, layouts, proofing and testing (without writing a line of code), teams are enabled to generate content and files that are immediately usable by digital systems and printing partners. This way, any updates or changes are implemented on your schedule, not when the service provider finds time to fit them in.

2) It eases and accelerates the adoption of digital experience

Whether you farm out your digital platforms to service providers, your print providers, or keep them in-house, setting up new channels typically means implementing the same content and communications across different teams and platforms. Regardless, mortgage servicers are left managing channels in silos. Borrower communications development processes can’t help but become inefficient, fragmented, and prone to error when each channel is handled by a separate implementation team.

The solution is to avoid having your content managed in multiple systems with redundant content entry and management. This requires organizations to centralize content into a single omnichannel hub that reuses content across all channels. This not only drives efficiency in managing and creating communications but also ensures consistency and greatly reduces the risk of error and non-compliance. Additionally, it makes it easier to add new communication channels as they arise since content stored in a cloud-based content hub can easily be shared to new or different digital endpoints, such as secure messaging, WhatsApp, etc. Be sure to note that any content management system you choose should support a modular approach (content stored as components like regulatory text, and marketing promotions) vs. a document-centric approach (content stored in letters, emails, and documents). This will ensure that your content can be delivered to digital endpoints via APIs to support website and mobile app requirements.

3) You can ensure continuity with a risk-free disaster recovery plan

Every business needs to have a plan in place for protection from serious events that can hinder normal business activities. Having a comprehensive recovery plan ensures the continuity of business operations during a chaotic situation, permits continuous compliance with regulations to avoid fines, and gives a business peace of mind. With time-intensive borrower communications, it is critical to be able to move to another print service provider at a moment’s notice in emergency situations.

When you are tied to one print service provider’s software environment, technical composition templates and production process, the handover during disaster recovery could be seriously delayed. While the outsourced print provider may have strategic partnerships and solid procedures in place for what to do in the event of a disaster, the time it takes to transfer production from one provider to another would interrupt the flow of communications to borrowers.

Making the shift to having your own teams manage communications using a cloud-based system that generates print-ready files for communications enables you to pivot between print providers at a moment’s notice for daily load balancing, capacity planning, or taking advantage of unused capacity. In the event of a major disruption, the process of transferring from one printer to another would be as simple as entering a new email address.

4) Save time and money on printing and the cost of images

Less time spent managing borrower communications, including authoring, approving, proofing, and testing—and the time and effort spent to ensure departmental silos are performing consistently—means fewer dollars spent, too. Labor is not the only cost savings mortgagers can expect, however, when moving borrower communications in-house.

Before documents can be produced, either as a printed letter or for a digital channel, an image of that document must first be created. A fee is charged for every image created by your outsourced provider and these, while small, can add up quickly given the quantity of communications sent to borrowers. By managing borrower communication content in-house, mortgage servicers would be able to produce their own images for both print and digital channels instead of paying a third party a flat fee per image.

With multiple channels and many communications, considerable cost savings would be realized over a comparatively short time. This is particularly true when using a modern approach that enables the ability to target content to recipients based on state. Borrowers often receive communications with an additional one to two pages attached that cover all the various state-level disclosure requirements, instead of just seeing the disclosure relevant to their region. It is now possible to get the right content (and only the right content) to the right recipient, saving not only on printing costs but on image costs as well.

Change for the better

There are many benefits of taking back control of the borrower communications process to reduce risks and costs. Cumbersome processes leave everyone frustrated, including those you seek to impress—your customers. Borrower satisfaction is a metric of increasing interest to lenders and, therefore, something worth devoting resources to. A modern customer communications management approach that modularizes content and supports content distribution across print and digital channels can help not only to increase the speed and efficiency of the creation of borrower communications, but also to advance the quality, clarity, and compliance of communications across all channels. All of which is a change for the better for you and your customers.