Major US Bank Saves 20% Costs by Optimizing Loan Servicing Operations

Challenges.

With over 46000 loan requests processed monthly (27000 for mortgages and 19000 for consumer loans), the bank was under tremendous pressure to maintain cost-efficiency while meeting customer expectations for fast and accurate service.

Key challenges faced were:

• High Volume and complexity: The bank’s diverse loan servicing needs required processing large volumes of requests accurately and promptly. Each loan type, such as mortgages, personal loans, and consumer credit products, had unique documentation and processing requirements that required skilled resources for efficient handling. This was putting a significant strain on existing resources.
• Slow turnaround time: Manual processes across the critical stages of the loan servicing lifecycle—document validation, income analysis, and compliance checks—led to delays. Settlement times are often extended to five days, leading to reduced customer satisfaction and operational bottlenecks.
• Cost pressures The resource-heavy model for processing loans demanded significant staffing to manage operations. This created cost pressures, particularly as loan volumes fluctuated. Scaling operations to meet peak demand periods with increasing costs was a persistent challenge.

Solution.

Coforge implemented process reengineering, quality improvement, automation, and technology to transform banking operations. The solution leveraged advanced tools and platforms to address inefficiencies and improve outcomes across the servicing lifecycle.

• Intelligent Automation and digitization
  • Automated loan boarding: Digitized and organized loan applications, enabling faster access and seamless processing.
  • Data entry automation: Used Robotic process automation (RPA) to streamline the data keying process for both correspondent and consumer loans, ensuring accuracy and speed.
  • Pre-funding and closing document verification: Automated pre-funding and closing quality checks to verify all funding documents for compliance and accuracy.
  • Automated document checks: OCR for faster document indexing and validation, improving accuracy and efficiency. Automated initial disclosure and compliance reviews to minimize errors early in the process.
• Advanced analytics for risk management
  • Predictive analytics: ML models were deployed to flag potential risks and inconsistencies in borrower data, enhancing underwriting accuracy.
  • Collateral and disclosure validation: Utilized analytics to verify asset valuations, disclosures, and compliance adherence, reducing errors and ensuring regulatory alignment.
• Workflow optimization and collaboration
  • LoanAccel tool integration: Deployed the LoanAccel platform to integrate seamlessly with the bank’s ecosystem, enhancing efficiency in pre-underwriting, originations, and processing.
  • Dynamic workflows: Created workflows that routed loan applications based on complexity and urgency, ensuring faster processing.
  • Third-party ordering: Streamlined integration with third-party services (title searches, insurance reviews) through APIs, accelerating overall servicing timelines.
• Standalone process management
  • Income analysis: Reviewed borrower income details to ensure compliance with underwriting standards.
  • Disclosure compliance: Conducted thorough reviews of final disclosures to ensure regulatory requirements were met before fund disbursement.

This tech-led operations approach transformed the bank’s loan servicing process, driving efficiency, accuracy, and scalability while reducing turnaround times and operational costs.

The Impact.

The impact of outsourcing the lending operations to Coforge BPS teams resulted in significant outcomes for the client, such as:

• The bank was able to allocate resources more strategically, reducing manual effort and using scalable automation, which resulted in 20% cost savings for the bank.
• Automating key workflows and eliminating bottlenecks significantly enhanced customer satisfaction, which led to 80% of loan servicing requests being processed on the same day.
• Customers will have Faster access to funds, with settlement time reduced by 40% from 5 days to 3 days.
• Increased reliability and efficiency boosted customer experience and the bank’s reliability through faster turnaround times and higher accuracy rates.