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The fintech industry and servicing technology. Agents using a legacy platform

typically have to switch between multiple screens and
needs to embrace applications just to piece together a partial customer
view. In most cases, batch processing guarantees that the
information available to agents is out of date.
transparency As a borrower, I experienced this first hand when I tried

to close out a credit card. Some months later, I discovered
By Matt Bivons my credit score had dropped. The closed card had
Canopy Servicing accumulated late fees for interest that had carried over
from mid-cycle. I called my bank to find out what I owed.
he Consumer Finance Protection Bureau's The agent said the bank couldn't tell me until the cycle
recent declaration that it was preparing to crack ended the following month.
down on junk fees can be interpreted in two
T ways (for more on the CFPB's announcement, My bank didn't want to infuriate a customer. On the
see The New York Times, https://nyti.ms/3p0bo13). contrary, the bank wanted to help. But the customer service
capabilities are only as good as the loan management and
On the one hand, the move will, no doubt, add to an servicing software used to manage the bank's credit card
already heavy regulatory burden. On the other, it is an program. The bank accepted its limitations because at the
argument for the industry to open up its "black boxes." I'll time it was an industry standard.
explain in this article why I believe a more transparent
industry will serve lenders and borrowers alike. That is no longer the case. Modern loan management and
servicing platforms can generate statements in real time.
A failure to communicate And, unlike the legacy platforms they are replacing, they
don't overwrite the events that happen in the life of a loan,
Consider the following data from eMarketer (https://bit. so the accuracy of those statements can be verified. (This
ly/3oZDzgL): is called immutability.)
Newfound transparency
• 56 percent of consumers said fintechs needed to
clearly outline the potential risks of using their Modern loan management and servicing platforms also
services. enable real-time communication with borrowers through
their preferred channel. Rather than surprise a long-
• 60 percent of consumers said fintechs should be time customer with a stellar repayment record with an
required to clearly disclose what data is given to overdraft fee, a bank that is using a modern platform
third parties and what data can be accessed in-app. could send them a text message warning that there is not

• 77 percent of consumers said they didn't read the enough money in their account to cover an upcoming
terms and conditions before using an app. recurring payment.

There are so many ways that modern platforms can enable
To paraphrase the captain in the movie Cool Hand Luke, borrowers and lenders to work together. They are the result
what we seem to have is a failure to communicate—and of thoughtfully combining mobile technologies with API-
both borrowers and lenders are feeling unjustly punished first platforms, machine learning, design thinking, and
as a result. agile programming methodologies.
Meeting in the middle Whether the CFPB moves to impose additional regulation
or not, newfound transparency in credit and lending
From the borrowers' perspective, they are getting surprised is likely to ensure that punitive surprises—like the
by fees they didn't expect to pay, and their information under-reported interest and unexpected late fees that I
is being shared without their consent. From the lender's experienced—will become part of the past. The movement
perspective, the terms of each product are clearly spelled toward more open, communicative relationships has been
out, and it is the borrowers' responsibility to read the fine gathering momentum. I think it is unstoppable.
print.

Can we meet in the middle? The answer is a resounding Matt Bivons is CEO of Atlanta-based Canopy Servicing, a comprehen-
yes! sive, configurable platform providing infrastructure for managing and
servicing all of a fintech's debt, credit and lending products in one place.
Here's how: To reach Matt, please visit linkedin.com/in/mbivons or https://canopy-
servicing.com/contact.
One of the major impediments to better lender/borrower
communication has been traditional loan management
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