The key to avoiding costly errors amid record-breaking origination volume
HousingWire recently spoke with ACES Quality Management CEO Trevor Gauthier about the importance of quality control among record-breaking volumes and how QC technology can help lenders avoid costly errors.
HousingWire: How have recent conditions impacted loan quality management?
Trevor Gauthier: Right out of the gate with COVID-19, we saw everyone making the transition to a remote work environment, which was incredibly burdensome on organizations that are used to being in their brick-and-mortar operations. This hindered their ability to collaborate because they’re used to employees and teams being able to walk down the hall or be in the same room – especially quality control departments, which are typically smaller in scope but often have to communicate across the entire organization.
As a result, we saw a big uptick in interest once the dust settled from the huge operational focus of moving a workforce remote and volumes began to increase because the need for technology in this new working environment became paramount. For our existing clients, the transition was more seamless because the cloud-based nature of ACES Quality Management and Control Software allowed them to access and utilize all aspects of the platform from a remote environment.
At ACES, we can get companies up and running in four to six weeks, so it’s not as burdensome for them to go through an implementation like ours as it might be with some weightier enterprise solutions. Our quick implementation process also helps operations departments speed up their QC and QA processes, which is critical for dealing with the kinds of volumes we’ve seen over the past six months.
It was bittersweet for us to be going through a pandemic and see the types of issues start to hurt the industry and bottleneck various parts of it. But at the same time, we were pleased to see lenders wholeheartedly embrace technology to increase their efficiency and maintain loan quality amid record-breaking volumes.
HW: Why should financial institutions incorporate quality control technology into their processes?
TG: The first and foremost reason is quality. Lenders need to be proactive in their QC process and catch things before they become an issue. With ACES, we offer the ability to scale into all different parts of a financial institution’s business; we’re not just focused on loans. We can help them conduct quality control audits for any part of their business and its operations. There’s a real strategic advantage to having a platform that can manage quality across the entire organization.
Second, there’s the return on investment. Whether that be from a personnel or an outsourcing perspective, organizations can get a lot more out of their workforce with technology. If an individual auditor is completing, on average, two audits a day using a manual or spreadsheet-driven process, that same auditor could be completing five, six, even seven audits a day with our platform. The presence of technology not only vastly improves efficiency, but it also saves the organization money by maximizing the productivity of existing resources and catching quality issues upfront before they become more costly errors when detected downstream.
For example, we had one client improve its overall productivity by 500%, increase the number of audits conducted per month by 200% and expand its sampling and loan selection criteria data points from 300 to 2,000 – all without having to add staff. These kinds of results are not an anomaly amongst ACES users and speak to the ability of technology to increase lenders’ auditing power.
From a bottom-up perspective, it allows the individuals that are in the trenches to be able to more effectively communicate with their business constituencies. From a management level, it enables institutions to get a full view of the trends within their organization. From a quality perspective, it reveals what types of items are assisting or impeding an organization while providing a real-time status of items so that the organization can look at those as benchmarks and be able to improve its efficiencies and performance going forward.
And last – but certainly not least – is security. Security has always been a top priority for both the financial industry and ACES Quality Management. Throw a pandemic into the mix, and it has only driven that focus to a higher level. During the first two quarters of 2020, we saw a 42% increase in internal security assessments. Security is built into the fabric of our products, infrastructure and processes so our clients can rest assured their data is safeguarded.
HW: What has ACES Quality Management done to adapt and thrive during the pandemic?
TG: Fortunately, we were already incredibly adept as an organization at working remotely. We have a Denver office, but the large majority of our workforce is already remote and used to collaborating online so we truly didn’t miss a beat.
What we did do as part of the pandemic was have an open dialogue with our employees, acknowledging that we are in a time of change and reiterating that our employees come first. To help out our team, we instituted a policy of having Friday afternoons off so our employees could have more time to either catch up on work or personal items or to simply be with family. We also spoke about being flexible with one another because so many people were dealing with personal challenges, such as monitoring online schooling or taking care of others. Our attitude was, “Your workday doesn’t have to be 9 to 5. It can fit in whenever it fits in because family is more important.”
For our clients, we made sure we were responsive to the market changes and developed solutions to support their needs as they arose, like introducing over 600 COVID-specific question sets in ACES and providing specific functionality for monitoring early payment defaults, which have been steadily on the rise since the onset of the pandemic. Ultimately, it’s all about real-time adaptability. Because of the architecture of our technology, we can make those changes within days, not weeks or months, thus allowing us to keep pace with the rate at which the market was changing from a regulatory and economic perspective.
During this time, we also entered into consumer lending and have spent a tremendous amount of time expanding our footprint in that larger market. Already, we’re working with two of the top 5 banks by asset size and the nation’s top credit union, and as these institutions continue to focus on cost control within their organizations, we foresee continued interest from this section in using our technology to hone in on quality across the entire organization to eliminate costly mistakes and reduce risk.
HW: What was the drive behind ACES Quality Management’s recent rebranding?
TG: We have had a tremendous amount of activity, development and change within the last year at ACES Quality Management, and there was a lot of excitement internally about where we were heading from a “go-to-market” perspective. With all of this change, we wanted to have a unified brand voice that recognizes that quality doesn’t happen in a silo or a vacuum; it’s an enterprise-wide endeavor, and if we are going to be a company that’s focused on quality, then the brand should reflect that.
At the same time, we did an internal assessment of our organization and asked ourselves if our tagline at the time, “Enterprise Risk Management Solutions,” was truly in alignment with not only how we viewed ourselves, but also how clients and prospects viewed us. From there, the conversations we were having started to zero in on quality, and we then engaged an outside firm to vet our perception by talking to our customers and prospective customers.
Luckily, the research that came back to us was in line with the direction in which we were already heading, and we decided the time was right to give the company’s brand a facelift to ensure it accurately communicated our value proposition to the market.
When we started to think beyond just the product we’re bringing to market and focused on why our customers love ACES as much as they do, the answer we found was, “It’s the people,” which we view as an extension of quality. It was a great research project that took six months, and we learned a lot about ourselves and what the market’s responding to.
Then the fun ensued, taking all that research and using it to refresh the look and feel of a brand that had been around for six years. We’re still focused on the same things from a technology and customer support perspective, but we wanted to put a new face on the organization that we can rally behind as we move forward in the next phase of the company’s journey.
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