In today’s competitive environment, efficiency is everything. In the servicing industry, this means managing the flow of information in a way that saves the organization time and money.
In short, the days of paper-based processes are quickly coming to an end. These business processes are time consuming, labor-intensive and prone to errors- all factors that can eat away at an organization’s profits.
Many servicers are utilizing cloud-based document management systems to quickly go paperless and improve back-office efficiencies as well as streamline the flow of information. It enables servicers to achieve key business objectives such as regulatory compliance, investor transparency, customer service and reduced risk to the institution.
Complying with changing regulations
For most servicers, complying with changing industry regulations can be a daunting task, yet many still rely on paper-based processes that make compliance cumbersome and costly.
Archaic processes make it difficult to fulfill document requests from auditors in a timely fashion. Servicers with these systems tend to store their loan files in offsite warehouses and when auditors request copies of loan documents it can take days to retrieve files.
Additionally, paper systems usually have less controls in place to manage compliance. It is difficult to accurately track where every document is at a given time, or generate a report of loan files that do not have the required documentation.
Conversely, cloud-based document management systems enable servicers to work with their partners to create a system of checks and balances.
It reduces errors that can arise from sharing data and documents. Organizations with these systems can retrieve files and data in real time, eliminating the problem of misplaced files. These systems have built in audit trails that enable servicers to meet changing regulatory guidelines and redeploy internal resources to more important areas such as growth.
Providing better service to stakeholders
In today’s mobile society, stakeholders expect easy access to important information. Paper-based systems make the process of accessing data cumbersome because documents have to be mailed, completed, returned and stored.
For example, let’s say that an investor needs a copy of a loan file and contacts the servicer to put in a request. It can take several days for the investor to receive copies of loan documents because servicers often have to dig through files to find loan documents before sending to the investor by regular mail or email.
In the above example, a properly configured document imaging system would allow the investor to log into the system and print the documents needed, which would take minutes rather than days. These systems offer fast and easy access to data. Users have the ability to securely access data from any location with an Internet connection using any device.
Improving data security
Servicers with paper-based systems put themselves and their stakeholders at a greater risk for security breaches such as email hacking.
Servicers that store documents in paper form send files using unsecure channels like email. Many of these documents are unencrypted, making it possible for cyber criminals to eavesdrop and steal vital information before it reaches the email.
These types of attacks have increased in recent years. Highly publicized security breaches like the distributed denial of service attacks have increased fear of cyberattacks and caused many organizations to seek out companies that offer greater security and data protection.
It’s time for servicers still using paper-based file systems to get off the sidelines and go paperless so that they can provide the service, convenience and security that their stakeholders expect.
Steve Wiser is CEO of Cleveland-based Specialized Business Software, a provider of custom software solutions for insurance, mortgage and financial services companies. For more information, visit www.specializedbusinesssoftware.com.