The financial services industry is continuously evolving, and it is essential to optimize collections strategies to maintain liquidity and minimize risk. One of the most critical choices for credit un...
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How Income Generation, Risk Management, and Transaction Enablement™ Help Your FI Win the Race
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You have worked hard to maintain your position in the race for your borrower’s loyalty. Don’t fall behind. Make sure you are taking effective steps to propel your financial institution to first place at the finish line.
These five tips can help turbocharge your loan portfolio. Get your financial institution ready to rev its engines! From managing risk to diversifying revenue and streamlining transactions, these tips will help you turbocharge your lending.
5 Ways to Effectively Turbocharge Your Auto Loan Portfolio
Boost your auto loan portfolio with these effective tips and tricks to secure your first-place spot in borrowers' loyalty.
Ensure Your Auto Loan Portfolio is Protected
Don’t allow your auto loan portfolio to become vulnerable to threats like fraud and delinquency. Manage your institution’s risk by taking the necessary steps to ensure it is protected with consistent supervision, assessment, and decision-making.
Maintaining an open line of communication with your borrowers, having a plan for every twist and turn your auto loan portfolio can throw at you, and utilizing tools and incentives to boost your borrower’s drive to pay are three effective methods to protecting your auto loan portfolio.
Don’t Get Lapped in Coverage
When it comes to protecting your institution’s auto loans, your portfolio will greatly benefit from a backup plan that protects you from lapsed coverage. Collateral protection insurance (CPI), otherwise known as lender-placed insurance, acts as the seat belt your portfolio needs to protect your financial institution’s auto loans in the case of a borrower’s collision coverage lapsing.
Diversify Your Auto Loan Portfolio
Diversifying your loan portfolio is an effective strategy for mitigating risk and boosting your institution’s long-term wealth. With more diversity in your offerings, your financial institution faces less risk in the face of unpredictable market values. This prevents you from metaphorically placing all your energy into one lap in the race. Your portfolio’s potential for long-term wealth is boosted, as well, thanks to the varying streams of income.
Make a Pit Stop with an Effective Collections System
Part of protecting your auto loan portfolio lies in being prepared for the worst-case scenarios, like auto loan delinquency — which negatively impacts both the borrower and lender. An effective collections system will allow your financial institution to recover the loss associated with delinquent auto loans, which can have a wide array of negative impacts on your institution, including:
- Financial loss. When borrowers’ auto loans become delinquent, lenders face the loss accompanied by missed payments.
- Increased operational costs. Delinquent auto loans cost lenders valuable time, energy, resources, and ultimately, money to manage.
- Decreased profitability. Delinquent accounts don’t just cost lenders the value of the missed payments. From unpaid interest to the cost of collections, auto loan portfolios face significant obstacles to their profitability when an account goes delinquent.
- Funding and liquidity problems. Delinquencies can damage an institution’s liquidity and funding, which can lead to problems when it comes to meeting payment obligations or investing in new opportunities.
- Complicated repossession and asset management processes. When an account falls into delinquency, the financial institution must recover whatever funds it can, which often means the start of a complicated and expensive collections process.
Create an Easier Way for Your Borrowers to Pay
It’s no secret that missed payments negatively impact both the borrower and the lender. Taking steps to boost the convenience of payments can play a significant role in decreasing delinquency rates. Modernizing and simplifying your financial institution’s payment methods will not only help with risk management, it can also act as an incentive for borrowers to choose your institution as their go-to for auto loans!
How You Could Benefit from Partnering With a Winning Pit Crew
The ultimate benefit of outsourcing the pit crew behind your auto loans is that it grants your financial institution the ability to focus on its mission, knowing that crucial parts of your auto loan portfolio are being handled by experts.
Lap the Competition with Income Generation
Income-generating products are a considerably effective strategy for creating a non-interest stream of income that helps mitigate the risk of fiscal loss for your institution. A pit crew specializing in income generation will allow your financial institution to increase revenue streams through add-on products, enhance your borrower’s loyalty and retention rates, help mitigate risk, and boost loan security.
With an income generation pit crew steering your institution toward the winner’s circle, you can:
- effectively diversify your portfolio
- generate non-interest income
- enhance borrower retention
Buckle Your Seatbelts with Risk Management
A risk management crew handles the intimidating but crucial tasks of identifying, analyzing, and making decisions about risks within a lender’s portfolio. These decisions can be difficult for a financial institution to navigate alone, which means that outsourcing your risk management tasks to individuals with specialized expertise in the topic will grant you the peace of mind you need to focus on your mission.
Hiring a team to support your auto loan portfolio may be one of the most beneficial decisions you can make for efficiency and success. With a risk management crew navigating the obstacles on your track to first place, you can:
- make more confident investment decisions
- receive experienced guidance
- allow your employees to focus on other tasks
Stay Ahead of the Race with Transaction Enablement
Manually inputting borrower information and posting payments to the core leaves too much room for error. Transaction enablement streamlines transactions for your institution. This allows you to focus on more important things, like the borrower experience and quality of your products — all while granting your borrowers the convenience of choice they crave and deserve.
Partnering with a transaction enablement crew will allow your institution to:
- offer your borrowers more convenient payment methods
- automate and expedite your transactions
- secure payments and transaction data
Let SWBC’s Winning Pit Crew Steer You Into First Place!
Take the lead with SWBC’s winning pit crew of experts. From income generation to risk management and transaction enablement, we offer a wide array of products and services that allow you to focus on what matters most- taking the winner’s circle in your race to success.
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