Peach to offer modernized portfolio migration capability—at no cost
By now, most lenders with legacy servicing tech have come to the determination that it’s time to modernize. Some of them are driven by a desire to support new asset classes. Others want to drastically improve their customer experience, or consolidate functionality currently handled by disparate service providers.
Yet in spite of their conviction, a sizable percentage of these lenders have yet to move on from their legacy servicing platform. When it comes down to it, migrating their portfolio to a new system comes with risks and costs that can often be prohibitive. As a result, many lenders find themselves handcuffed to a legacy servicing platform they don’t want.
This is one of the reasons we pioneered the Adaptive Core™, a loan management system built for radical flexibility. This has given us a unique ability to rethink portfolio migrations—and to address the problems of risk, cost and timelines.
This fall, we’ll be releasing our free portfolio migration capability—the first ever of its kind. For lenders stuck between the costs and benefits of migration, self-service migrations will be a game-changer.
More on our solution in a moment—first, we’ll address the three main challenges with legacy lending portfolio migrations.
Three challenges with legacy portfolio conversion methods
Challenge 1: The risk
Legacy portfolio migrations are typically conducted by a third party—either an outside vendor or your new servicing provider—working in collaboration with your internal team. The two teams migrate loans in batches, troubleshooting issues on a per-loan basis as they arise.
Because every system behaves differently in its terminology, interest accrual, rounding and status mapping, there’s a lot that can go wrong. And when migrations involve manual data entry—which they almost always do—errors are unavoidable at scale.
What’s more, migration processes are notoriously brittle, and unexpected discrepancies can arise in your data even after rigorous testing. Reconciliation down to the penny is painstaking work, and seemingly simple issues like rounding can cause your new and old systems to disagree. Minor inaccuracies can compound into unintended consequences for the borrower—for example, an inaccurate payment amount can result in an overdue status in your new system. These challenges can be compounded by migration methods that transfer only a snapshot of each loan, rather than the loan’s full history, making it much more difficult to rectify discrepancies as they arise.
A worst-case scenario is for your borrowers to log in and see missing or incorrect data in their account. This can jeopardize your customer relationships and expose you to compliance risk.
Challenge 2: The timeline
Because you’re dependent on your new servicer and potentially a third party to conduct your migration, you have limited control over your timeline. If your new servicing platform hasn’t invested in maximizing efficiency and preventing errors, the migration process can require a great deal of time and effort. It’s not uncommon for migrations to take 6-12 months or even longer.
When discrepancies do arise, it can be a challenge to gather the right people on both sides to troubleshoot and remediate the root cause. This can be made all the more difficult when a migration occurs over a single, momentous weekend but then reconciliations fail and cause a rollback. Rollbacks then force new sprints and a rescheduling of the migration for a future weekend. But with us, you can migrate as few or as many as you want and let them run concurrent to your existing system to test and reconcile before committing to a production shift, no rollbacks required. This is also why clients consider us a vendor for backup servicing as well as primary production servicing.
Challenge 3: The cost
Servicers often charge hundreds of thousands of dollars or more for portfolio migrations, depending on the size and nature of your portfolio. The first reason for the high cost is the manual nature of the typical migration process—and the fact that lending platforms are rarely designed to optimize migration efficiency. The second reason is that you’re paying for a third party to learn your current system—an investment that is not accretive to your business in the long run.
By automating manual tasks, the total time spent migrating is drastically reduced, and your team can move to production in less time. The obstacle is that no lending platform has been designed for such modern migration until now.
Peach’s portfolio migration capability
Our portfolio migration tool is a complete reimagining of portfolio migrations, giving lenders the ability to break free from their legacy tech stack without incurring unreasonable risks, costs and delays.
We’ve been planning modern migrations for some time. They’re made possible by our Adaptive Core and by our Loan Replay™ technology, which makes it straightforward to insert events, such as payments, anywhere in the timeline, with recalculations happening automatically.
Our modern process empowers your own engineering team to conduct the migration to Peach. Using the same Peach APIs they’ll eventually use to interface with our system, they’ll call Peach’s typical endpoints. Once they verify that the migration is working for test users, your engineers can write simple scripts to automate the conversion process, eliminating the need for manual data entry. When the migration is complete, you’ll have access to all the benefits of the Peach platform, like our Adaptive Core, Loan Replay, Compliance Guard™, first-party collections capabilities and more. The typical migration to Peach will take just 8-12 weeks.
The idea of our modern migration isn’t to put more work on your team—it’s actually far less work than a traditional migration thanks to automation, efficiencies and error-preventing features of our capability. And we’re here providing migration assistance when and where you need us. Meanwhile, you get to remain in control of the migration timeline, and you’ll have close oversight of your data, reducing the likelihood of errors.
For lenders interested in the benefits of a modern, best-in-class lending platform, our portfolio migration capability opens up the possibilities of modernization without the risks and drawbacks of legacy migration methods.
To learn more, visit our portfolio migration page. You can also contact us or send an email to info@peachfinance.com.