Automation vs Manual Data Entry


The U.S. banking industry is constantly looking for ways to enhance their level of service, most recently involving the utilization of cutting-edge technology. However, banking covers a variety of asset classes with a variety of loan terms, spread across various lending facilities. Each variation has its own complexity and nuance that makes technological implementation challenging.


In this scenario, our client placed a portfolio of HELOCs on a system not specifically designed for their loan terms. The result was two years of borrower payments being inaccurately split between principal and interest. The solution was to move these loans and all transaction data to a new system designed specifically for HELOC portfolios --- A simple proposal that turned out to be far more complex than anyone previously anticipated.


The SOG team of real estate credit experts were used to manually unwind two years of transactional data to ensure that the borrowers were being charged the appropriate amount of interest. Our team built and deployed a customized model that allowed us to import the raw transaction data, recalculate principal and interest, calculate the over/under payment by each borrower and automatically check for discrepancies. Determining the scope of the problem and the interest discrepancy was only the first piece of the puzzle.


The next step in the process was to transform the transactional data into a usable upload format that the new servicing system could consume.  A previous vendor was unable to complete this task as the old system did not create a suspense account for borrowers past due on their scheduled payments. The SOG team built another customized model to manually manipulate the transaction data into a specific format so the new system could process the information.


At the conclusion of three months, our team had successfully calculated refunds or charge offs for over 5,700 borrowers, allocated over 130,000 borrower transactions, and migrated the entire portfolio to a new servicing system.  Our team worked diligently to help our client resolve their issue and ultimately participated in the dispersal of borrower refunds and in the reissuing of 1098 tax documentation for almost every borrower.


Every technology has benefits and risks, but very few, if any, take away the adaptability and versatility of a well-trained team of financial professionals.