A new report from Aite Group details the market conditions and default management processing issues that challenge U.S. retail lenders. It assesses solutions designed to automate and improve processing efficiency, and discusses where they are and where they are headed.
U.S. credit portfolios are reeling from a series of unprecedented challenges that have combined to derail forward progress. Lack of consumer spending and borrowing has led to plummeting retail loan balances and rising delinquencies. Coupled with low interest rates, high default rates have driven lenders to attempt more efficient collection of outstanding debt, a task made even more challenging by loan complexity and tremendous growth in the number of accounts.
While new solutions and technologies aimed at originating or servicing loans have grabbed the interest and budget dollars of credit managers in recent years, default processing remains largely underserved by investment in upgraded technology. Solutions providers that anticipated a need for more open and intelligent solutions and invested time and resources into their product have been rewarded with significant market share among retail lenders.
“For the majority of lenders, managing non-performing loan portfolios with one-size-fits-all technology will fail to adequately reduce losses,” says Christine Pratt, senior analyst with Aite Group and author of this report. “Strong evidence suggests that vendors that have invested in upgrades, embraced new deployment models, and expanded pricing options to address the needs of today’s lenders will find securing new business comparatively easy going forward.”
The report profiles default management solutions provided by Akcelerant Software LLC, CGI Technologies & Solutions Inc. (CGI), CSC, FICO, Fiserv Inc., FIS, Lender Processing Services Inc. (LPS), and Shaw Systems Associates Inc.
D.C.