What trends are you currently seeing in the servicing sector of the industry?
I think from our perspective and what we are hearing is there is a lot of concern from servicers today in managing their entire vendor network. We think this is happening because there is a new focus on making sure that servicers understand the downstream implications of third-party vendor oversight. We feel like we are well positioned as a service provider because of our abilities to answer those questions.
A big part of what’s facing servicers today is not only the ability to manage their vendor networks, but to adhere to all of the CFPB implications and regulatory oversight that they know is there. Servicers are subject to audits non-stop from the state or federal, so I think being a good partner for a servicer today really means that you really need to give them a good comfort level that you are managing vendors and managing data as well. We think that the consolidation of the vendor space will continue to shrink because there are less and less people that can check all the boxes for the servicers.
How do you grow these relationships between servicers and service providers and build them to be stronger?
We believe you should be able to give all market participants the service they need to be successful. It’s about developing and providing technology-lead solutions. As far as looking around the industry and trying to figure out where the next opportunity is, there seems to be a lot of changing and shifting of vendors in the big servicing shops and banks. There has been a steady stream of RFPs and RFIs out and I think people are looking for new ways of attacking old problems. Using data and feedback on performance based on data allows you to differentiate yourself. I think we will continue to see that grow as far as what people are looking to do and how they analyze the problems that they are facing.
How do you work to find solutions for the problems facing the servicing industry?
I think the servicing industry is faced with a real problem around how the servicing fee structure is based today, and I think they are under pressure. The servicing fees haven’t moved in the last few years but their compliance needs and the regulatory and legal environment that they are in today has forced them to increase costs across the platform.
I think we continue to invest in and grow our technology platforms with the idea that you are going to need to be able to provide innovation to the servicers. As the vendor population shrinks, you want to be able to offer more solutions. I think in order to be a part of the servicers you need to be innovative and customize solutions.