Performance Analysis & Process Improvement Consulting Services

Operating your company at the highest level of efficiency and effectiveness will reduce costs, enhance the customer’s experience and provide employees with more satisfaction – all equating to being more competitive.  Hilltop understands the importance of efficiency and its various benefits which is why we have developed a sophisticated tool, PerforMetrics© that assesses our Client’s operating and financial metrics and provides the insight as to where our Client should begin to change/improve its business.

Our competitive differentiators in this area are –

• Hilltop’s PerforMetrics© team is one of or possibly the most experienced consulting team in the lending and loan servicing industry. Our leadership started the peer group studies in the early 1980’s (KPMG’s MorPro and MorServ) and have helped many companies understand their performance and how to improve it.
• Our industry experienced team understands your business (both the operational and financial aspects).  Our experience allows the team to customize our methodology to meet your Company’s unique challenges and take advantage of its strengths.
• The team will translate the PerforMetrics© findings into plausible recommended solutions that will  maximize the Company’s operational efficiency, decrease costs, improve overall customer experience by increasing speed/accuracy/completeness of the loan processes and increase revenues (if possible).
• Our focus on emerging technologies (like those mentioned in our recent It’s Time article in the “Compliance Magazine”) can potentially enhance your business processes.
• Given our past experience (see #1), our CEO knows the challenges of using “peer group” results in making tangible changes to a lender/servicer operations.  One factor that is critically important to address is what he calls “Corporate Factors” (see p.9).
• Our approach is to “fix” the inefficiencies and high cost areas that are identified as “high value” – we don’t try to fix everything.
• While process improvement methodology (i.e. re-engineering) is not unique to any one consulting firm (often similar between firms), our BPI/BPR teams are powered by very senior, highly experienced industry veterans.  They have “been there and done that” first hand.

Hilltop’s Performance Analysis and Process Improvement consultants use the following basic steps to achieve enhanced efficiency and reduced costs for our clients.  The steps are as follows:

• identify the Client’s weaknesses and/or opportunities to be a leading performer by having our highly experienced process improvement (BPI) consultants perform an in-depth assessment as follows:
  • inquiry of Management and line operations personnel as to their perspectives and recommendations,
  • observations of the organization’s structure, communications, actions and specific accomplishments,
  • performing a comprehensive analysis of the Company’s policies,
  • analyzing and testing processes to determine purpose and effectiveness,
  • identifying the controls and analyzing their effectiveness (is there duplication, too much risk management, “overkill” in executing, monitoring and retesting controls,
  • assessing technology organization, communications between the business and tech teams, applications and versions being used,
  • assessing use of any workflow analyses and technology to automate the processes,
  • discussing opportunities to enhance technology with the client’s vendors,
  • assessing the use of Business Intelligence and Data Management.
• measure the operating metrics (PerforMetrics©),
• measure the costs and revenues for the business (PerforMetrics©),
• calculate the cost of regulatory compliance and address whether compliance can be achieved with less effort and people (more technology and exception reporting),
• prioritize the Client’s opportunities for improved efficiency and lower costs (target areas),
• assess the Client’s willingness and ability to “make changes”,
• propose the scope of Hilltop’s BPI program,
• identify the “future state” for each prioritized target area that is in scope,
• identify the operating and financial metrics that should be possible if the future state is achieved,
• identify the “gaps” between the “future state and current state”,
• plan for the changes and solutions needed to eliminate the “gaps”,
• execute the BPI implementation,
• reperform the PerforMetrics© analysis to determine if the target metrics have been achieved and begin the next set of target area analysis and BPI efforts.

PerforMetrics© is Hilltop’s tool to identify the operating metrics, financial metrics including key profit drivers and the Client’s dependencies in achieving such.  The metrics can be used to identify specific business units, products, delivery channels, operational areas, customer relationships, technology applications, etc. that need change as they do not meet leading performer levels of performance.

PerforMetrics© can also be used to analyze more detailed aspects of our Client’s business.  An example may include where Hilltop analyzed the cost of servicing a non-performing loan, the amount of escrow and foreclosure advances that are typical, the recovery rate of such advances in insurance or investor claims, identifying the overall claims recovery rate, the cost of REO management, the loss per loan for various resolutions (foreclosures, deed in lieu, short sales, rate and term modification, principal reduction or any other forbearance structure).  Another example is using the tool to analyze detailed aspects of the loan origination business.

PerforMetrics© also helps our clients with answering these types of questions:

• Why are our customers complaining about the loan process – too long, too many documents, too much signing, etc.?  Does every lender to the same things?
• Why can’t the lender receive the borrower data directly from banking, investments, employers, recent cash/credit transactions  and any other required information?
• Can I pay my loan payment using Venmo, Helle, CashApp or ApplePay?
• Regulatory compliance costs are out of control!  Do we know what our compliance costs are and can we reduce such without raising regulatory risk?
• Origination costs are 3x higher, servicing costs are 2.5x higher than costs in the 1980’s – why?
• No one is perfect but are there comments about data errors, document version issues, multiple data entry requirements, too many touches by all parties, transfer issues of servicing data, etc?
• Do the technology apps reduce manual processes especially when loan volumes are high?
• Is the company using tech apps that reduce manual or labor heavy efforts in high cost areas?

Based on our PerforMetrics© and BPI assessments, Hilltop has identified automating process workflows will increase efficiency, lower costs, decrease the impact of market changes in business volume and it enables a “triaging capability” (or prioritization of what needs to be done first).

Simply put, PerforMetrics© and our BPI efforts have helped our clients to do the following:

• increase profitability through cost reductions or cost avoidance (reduce need for cost increases when volume increases significantly),
• eliminate unnecessary “hand-offs”,
• streamline existing processes,
• reduce the number of times any person in the process “touches the loan”,
• increase flexibility of processes to handle new business & products,
• eliminate reports that do not help manage the business and reduce the size of such reports,
• eliminate controls processes that do not enhance compliance i.e. reducing the “check the checker” syndrome,
• reduce Management and overhead costs,
• eliminate “buying the newest technology” while at the same time ensuring that the Company uses the right technology version and “add-ons”.

Hilltop’s BPI consulting can also be utilized to enhance the ongoing client monitoring of its business and identifying when/how/what changes need to be made.  Our clients learn from the PerforMetrics© and BPI methodology to also address operational challenges such as operating or process backlogs, customer service problems, merging operations, changing from decentralized to centralized processing to closing, implementing new technology, etc.

The Hilltop Companies’ business process analyses are intended typically to achieve a target state different from your current operations.  The objectives of achieving the target state can include, but not be limited to:

• Improve competitive position in the market with lower cost delivery,
• Ability to attract more customers with lower priced services,
• Enhanced controls in one or more of the operating units,
• Improved operating efficiency,
• Eliminate unnecessary processes and “hand-offs”
• Accommodate reductions in force,
• Improve customer service and response times,
• Responsiveness to market movements,
• Ability to automate processes through workflow automation
• Position the company for forthcoming market change and increase flexibility of processes to handle new business & products
• Eliminate reports that do not help manage the business
• Eliminate “checking the checker” processes
• Assess management and overhead cost structure
• Other reasons that generally improve the company’s operations and profit margins.

As part of our business process analyses, we also will often assess people and technology.  In our experience, most companies have core capabilities but also have areas of operations that either need significant change and investment or be considered as a candidate for outsourcing such functions.  We can assist in the methodology to identify your company’s strengths and weaknesses and determine what the solution alternatives are in the short and long term.   We are often drawn into the vendor selection processes if outsourcing or new technology is being considered.