Is vendor compliance more complicated than it needs to be

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For lenders, servicer audits are a massive headache! With each servicer, you have a series of challenges.

  • Each audit can take up to 40 hours per servicer for each audit cycle
  • With lenders having between 5 to 50 servicers, these man-hours multiply drastically

Each audit cycle, compliance personnel spend valuable hours reconciling internal and external information, documentation, and complaint records. External compliance has so far been an inefficient process, diverting resources of the company that could be spent on bottom-line activities.

Servicer audits involve time-consuming and redundant activities. This is because each audit requires:

  • Distribution of the audit questionnaire
  • Evaluation of responses from servicers
  • Creation of remediation reports
  • Following up with servicers and answering questions
  • Dealing with document exchange issues
  • Performing on-site audits as required

All these activities are done using multiple systems and involve various dependencies. It can be extremely challenging to ensure that audits are done accurately and on time. Even though almost 70% of the process can be a rehash of the previous audit, each new audit requires the same amount of effort and time because the process is not automated and compliance personnel have to repeat each process every time.

However, with the right use of technology, audits don’t have to be such an administrative nightmare.

A robust vendor management system can keep track of which parts of the audit are repeats from previous years and which parts need fresh input. A project management approach to the audit process, using shared software, can reduce the number of iterations required to complete the audit.

Provana’s IPACS (Integrated Performance Audit and Compliance Solution) aims to remove the inefficiencies in the vendor management process by pulling in everything within one ecosystem, eliminating the need for multiple tools, and allowing real-time flow of information from one party to the other. It automates most of the redundant activities and implements efficient processes that save valuable time and money for your firm.