Consumer Finance Best Practices & Strategies

Proven Consumer Finance Leading Practices to Adopt

  • Best Practices (#289) / Consumer Finance / Back Office Operations

    Best Practice (Good)
    Centralize all customer credit/risk checking activities to a single back office group, and standardize communication procedures between that group and other areas to ensure that credit information is accurately communicated.
    Typical Practice (Bad)
    Allow multiple back office groups to check the client’s risk rating when opening an account, even if it means a client can be approved in one group but declined in another.
    Benefits: Reduces rework and confusion related to credit/risk checking activities and findings related to account opening.
  • Best Practices (#290) / Consumer Finance / Back Office Operations

    Best Practice (Good)
    Create standardized communication protocols for the back office when a customer account opening request is rejected. Ensure that all relevant information is communicated to branch employees when a rejection occurs.
    Typical Practice (Bad)
    Allow branch staff to neither explain the reason some clients who attempt to open an account are rejected, or obtain a sufficient answer from the back office.
    Benefits: Improves overall customer experience and increases the likelihood that the customer will attempt to open an account at the same branch location after any outlined issues have been addressed.
  • Best Practices (#291) / Consumer Finance / Collections

    Best Practice (Good)
    Assign clear quality standards and accountability for errors, and follow up when errors occur, to reduce excessive data checking and rechecking. The two groups need to communicate with each other before involving Payments Processing.
    Typical Practice (Bad)
    Allow Collections and/or Field Operations personnel to forward payments with incorrect or inadequate information, forcing Payments Processing to perform research.
    Benefits: Clear accountability, follow-ups and root cause analysis help to reduce errors. Depending on the frequency and the number of different types of errors, these improvements can eliminate 40-60% of the rework caused by errors.
  • Best Practices (#292) / Consumer Finance / Consumer Lending

    Best Practice (Good)
    Document problems encountered by loan processors, and provide a formal set of solutions for each issue to ensure uniform problem resolution.
    Typical Practice (Bad)
    Train specialized processors to handle problematic loan issues so that error resolution is centralized and more tightly controlled.
    Benefits: Formal guidelines to resolve standard, repeat issues decrease cycle time as processors do not have to spend time searching for a method to solve the problem.
  • Best Practices (#293) / Consumer Finance / Mortgage Lending

    Best Practice (Good)
    Have agents provide underwriting with a cover letter for each underwriting application informing the underwriter of both the positives and negatives about the case.
    Typical Practice (Bad)
    Have agents verbally (or through email) notify underwriters of possible problems for each individual application.
    Benefits: Supplying this letter may take an additional 10 minutes, but it may save days, or even weeks, in the underwriting process.
  • Best Practices (#294) / Consumer Finance / Loan Operations

    Best Practice (Good)
    Balance workloads and create estimated processing times for submitted applications to decrease the frequency of regular jobs becoming rushed jobs because of a lack of capacity and to manage expectations.
    Typical Practice (Bad)
    Ensure that roughly 50% of closing times are rescheduled because of an imbalance between loan application volumes and underwriting resources.
    Benefits: Average processing times or productivity measures do not reveal the actual time required to complete an item or the true processing capability, since workers may adjust their processing speed based on the demand load. Busier days will lead to faster processing, while less busy days cause slower processing times - making the work fit the day. Basing capacity models on best-demonstrated performances can identify as much as 40% of additional capacity.
  • Best Practices (#295) / Consumer Finance / Student Loans

    Best Practice (Good)
    Submit pricing schedules for loan rates as scheduled and needed according to market requirements.
    Typical Practice (Bad)
    Submit pricing changes very close to or after the required times for market benefit.
    Benefits: Timing the pricing release according to the market activity creates the best possible representation of the opportunity and benefit for the products.

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