Customer Story: Validating Data From Third Parties
Table of Contents
Overview
A prominent investment firm had been growing its mortgage business and consulted with BaseCap Analytics to address its growing data issues. With a portfolio of 7000+ loans, each with 600+ data points (columns), the firm had grown their loan volume to roughly $1.66B. As they grew, an expanding servicer ecosystem presented scalability issues with existing manual workflows.
These growing pains presented an opportunity to the company: modernize legacy processes to achieve greater speed and accuracy with automated data validation software.
Late-night stare-and-compares are so 2010. Find out how BaseCap automates quality control tasks like regulatory checklists.
Challenge
The client had over twenty unique servicers reporting and remitting in different formats and with varying levels of data quality.
Servicers refused to adjust their reporting to match requirements and sent files in frequently changing layouts. Without normalization, analysts were required to invent increasingly complicated queries and conversion workbooks with each additional data source. Every month created tension for staff as servicers sent a brand-new file that had to be re-interpreted into the existing processes.
Most of the analysts time was spent:
- normalizing new data sources
- cleaning up data
- validating data for accuracy
- revising queries in order to include new servicer data in daily reports
The team’s energy slowly shifted away from value-added functions, like:
- analyzing data for business insights
- performing liquidations
- servicing high-risk accounts.
Additionally, patching the broken processes became more and more overwhelming. Redesigning the data pipeline was like fixing the engine on a moving train.
Over time, the entire process became unwieldy. Ingesting data from multiple servicers required ongoing management. Reporting queries became more convoluted. Moreover, internal knowledge transfer became exceedingly difficult; new hires struggled to orient themselves to a complex pipeline of data.
They needed to not only ingest the data from each servicer but to ensure the data was of quality and standardized without staff having to review files and correspond with their servicing counterparts.
Solution
The investment firm chose to work with BaseCap because of our team’s extensive experience helping other financial institutions to improve their legacy data workflows.
With a data validation platform that both automates cumbersome processes and transforms data from different systems, BaseCap was the right fit to evolve broken workflows that had evolved from years of dealing with data issues incrementally and in a siloed fashion.
Our team of experts strategized several changes to improve the firm’s data pipeline.
The investment firm leveraged BaseCap to:
Establish data setups and ongoing data feeds into the servicer oversight vendor, SBO.NET
Deliver SBO.NET-specific, ingestable files on a daily, weekly, and monthly basis using ETL
Automatically validate every available data source, with capacity for thousands of data source connections.
Accurately manage large-scale data transfers between servicers
Build a wide variety of unique pipelines
Maintain consistent formatting, data quality, and timeliness of loaded data
"I think the tool is great because it's an out of the box solution where you can give a business admin, or someone that's knowledgeable enough from a tech perspective and a business perspective, to really drive and make the changes and really own the administration of the tool."
Results
Clean, standardized reporting and data from every loan servicer
Cut costs by reducing the number of servicers in their portfolio
Freed up staff to address servicing issues and add greater value
With automated data validation in hand, the investment firm could finally take the steps required to modernize legacy processes. The BaseCap platform also allowed them to pursue business enhancements beyond automation.
For example, the client decided to reduce the number of servicers in their portfolio. BaseCap became the resource for managing accurate data and loan transfers as the client moved loans from servicer to servicer. They successfully consolidated third parties to two primary servicers, now making up ~97% of the loan volume.
Furthermore, with renewed confidence in data boarded from third parties, the company could focus on strategic initiatives. No longer distracted by data quality issues, they took steps to increase loan volume and strengthen core competencies. Amid compressing margins and a shrinking talent pool in the mortgage industry, these steps became essential to the company’s competitive advantage.
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