Consumer Portfolio Services is leveraging document automation to enhance efficiency and prevent fraud.
Machine learning, artificial intelligence, and e-contracting advancements over the past 12 to 18 months have enabled Consumer Portfolio Services (CPS) to streamline the process of reviewing approximately 26 document pages per contract,Teri Robinson, executive vice president of sales and originations, highlighted at Auto Finance Summit East 2024 in Nashville, Tenn.
Starting with automatically rejecting deals, CPS has progressed to automating approval decisions by implementing a score model. This shift has led to a 99% automation rate in loan decisioning, significantly reducing the workload of the credit department,” she added.
CPS has seen significant improvements in the funding department as a result of automation enhancements, according to Robinson.
Furthermore, these upgrades have shortened the company’s underwriting time from nearly four days per package to less than three, reducing errors caused by human oversight,” she noted.
“When I first joined, we were manually processing credit applications received via fax. We had a large credit department due to the manual nature of reviewing income and credit reports, making annotations with a pen,” Robinson explained.
CPS’ outstanding portfolio increased by 1.7% sequentially and 4.8% year over year, reaching $3 billion in the first quarter, as per the latest earnings report.
Reasoning Behind the Investment
Financial constraints delayed the transition to digital automation and e-contracting for the Irvine, Calif.-based organization, as CPS lacks support from a hedge fund or major bank,” Robinson mentioned.
“Initially, automation requires a significant financial commitment, which is why we delayed the implementation. However, in today’s technological landscape, investing in such tools is essential,” she emphasized.
According to Robinson, adopting AI and machine learning enhances employee productivity by providing consistent, error-free outcomes that safeguard the company’s portfolio.
Safeguarding the Portfolio and Combating Fraud
By embracing technology, CPS has expanded its anti-fraud measures, enabling the assessment of various indicators such as consumer relocation frequency, job changes, and contact number variations that signal potential fraudulent activities,” Robinson revealed.
“While the initial investment in machine learning may be substantial, the savings from mitigating fraud could amount to millions annually,” she underscored.
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