As the complexity of managing unsecured consumer loan documents continues to grow, lenders must adopt sound strategies to successfully and efficiently navigate the challenges ― from accelerating lending workflows to achieving document compliance certainty across multiple states and jurisdictions. While some lenders attempt a DIY approach, it is often met with unforeseen risks, trials, and costs. Discover how one lender embraced automation with Wolters Kluwer and Expere®.
Background
A rapidly growing consumer lending company supporting an active paperless initiative sought to fully automate its loan document processing in 13 states, with a goal of expanding into all 50 states within two years. The lender, which executes a large volume of unsecured personal loans, initially launched an in-house project to accomplish this objective. Yet the organization encountered significant risks, unexpected challenges, and hidden costs within its DIY initiative.
Challenge: Overcoming multi-jurisdictional regulatory complexities
Scaling operations into new states and jurisdictions dramatically increases regulatory complexities for lenders, complicating document creation and compliance processes. In order to develop a successful multi-state lending footprint, the financial organization recognized that it needed the right tools to automate document generation, meet stringent and varied compliance requirements, and ensure seamless operations across multiple jurisdictions.
Despite trying to facilitate its own solution ― investing more than $1 million and considerable internal resources into the effort ― the lender encountered a variety of obstacles. To begin with, the company struggled to keep track of the extensive range of regulations that vary from state to state, leaving it vulnerable to legal and compliance risks. In addition, the organization grappled with how to streamline processes across different business lines. The company was also hindered by the time-consuming, continuous process of monitoring and updating documents necessitated by ongoing regulatory change.
With internal deadlines looming, the lender was forced to abandon its DIY approach after several months. It realized that it required outside professional assistance to ensure regulatory adherence, reduce risk, increase efficiency, and allow for scalability. The lender wasn’t alone; a growing number of companies are falling into the DIY trap. Drawn by the allure of building an in-house solution, financial organizations are instead uncovering significant risks, hidden costs, and unforeseen challenges in these approaches, notably around compliance issues and scalability.
The lender desired a solution that would enable it to:
- Leverage vendor-provided documents with its own content
- Create a new SFDC loan origination platform to achieve a fully paperless process
- Operate in multiple states, with continued expansion
- Off-load document compliance support and maintenance
- Easily add new products to its loan portfolio offering
- Automate and support large volumes of applications and closings
- Ensure reliability of systems
- Lower costs for loan acquisition delivery systems
Solution: Document compliance certainty, scalability, and accelerated lending workflows
The lender recognized that selecting the right partner was critical to getting its project back on track. It needed a vendor with deep industry expertise, comprehensive tools, and proven compliance mechanisms. Based on a recommendation from its Salesforce implementation firm, the lender engaged with Wolters Kluwer, a global leader in professional information, software solutions, and services. The organization not only brings decades of cumulative experience monitoring the U.S. regulatory landscape to the table but is also a trusted market leader in the provision of integrated lending and regulatory compliance. Wolters Kluwer serves more than 7,000 financial institutions, including 85% of the top community banks and non-bank lenders.
Working with Wolters Kluwer’s sales and solutions consulting teams enabled the lender to address all of its questions, concerns, and challenges. The team was able to assess the lender’s portfolios and hone in on the optimal solution to meet its objectives. After numerous meetings with Wolters Kluwer, and completion of a successful proof of concept, the lender discovered everything it needed ― and more ― in Expere®.
Deploying the Expere centralized document system has enabled the lender to streamline processes, reduce errors, and easily scale to meet expansion requirements. Providing a complete set of tools for creating, managing, integrating, testing, and deploying documents, Expere is ideal for financial institutions with footprints in multiple jurisdictions, as well as those changing their loan origination system (LOS) or administrative services only (ASO) agreements.[WP1] Expere applies comprehensive, automated compliance logic and business rules to dynamically create loan origination documents that fulfill applicable state and federal regulations.
Key advantages include:
- Warranted content ensures documents are compliant and up-to-date, providing peace of mind and reducing the need for an internal, time-consuming process
- Automated solution reduces the need to build an in-house team to manage regulatory updates and achieve compliance confidence
- Dynamic content allows common language to be written once and reused across documents, reducing the number of templates that must be managed and updated
- Content across multiple lines of business provides compliance and consistency across the organization
- Streamlines document generation across loan types and consolidates custom documents with shared language into a single document
- Rules-driven automation reduces the risk of manual error
Because the lender engaged with experts from Wolters Kluwer’s Professional Services, the company was able to seamlessly implement an effective solution more quickly and less expensively than it could on its own through DIY solutions, resulting in minimal disruption to daily workflows and significant time and cost savings. The Wolters Kluwer team also worked closely with the lender to implement and train employees on the solution to ensure user adoption and maximized return on technology investment.
The knowledge and expertise gained from Wolters Kluwer’s Professional Services team and the Expere solution have enabled the lender to grow and successfully navigate today's regulatory environment ― streamlining processes, reducing errors, and providing the scalability needed to easily expand into new states and jurisdictions. The lender has confidence in knowing the solution’s automated compliance logic ensures that loan documents across all business lines meet all state and federal regulations, reducing legal risks. Even more, as a part of the lenders’ subscription, Wolters Kluwer continuously monitors and updates all of the standard content they use.
Results: Multi-state expansion with seamless, automated compliance certainty
Having invested in the right tools and expertise to support multi-state expansion and ensure ongoing compliance and efficiency, the lender is well on its way toward accomplishing all of its objectives. Working with Wolters Kluwer enables the organization to overcome the many challenges of its discarded DIY approach ― and even do so with long-term cost savings compared to attempting to keep the project in-house. By utilizing Expere’s centralized document management system and engaging with Wolters Kluwer’s Professional Services team, the consumer lender has been able to:
- Seamlessly navigate consumer lending regulations across every state and local jurisdiction using automated, warranted rules-based compliance documentation
- Achieve document compliance certainty
- Accelerate lending workflows
- Eliminate time-consuming manual processes and reduce the risk of errors with rules-driven automation
- Streamline document generation across loan types
- Expand into new markets and jurisdictions with the scalable system
- Easily incorporate additional digital lending solutions in the future, including Wolters Kluwer’s eVault, SmartSign Plus, Wiz®, and more
Providing warranted document compliance certainty
