Rising Delinquencies Throw Spotlight on Default Management Software

Eight vendors that help banks handle distressed consumer and small business loans are bound to attract notice from retail lenders this year, an Aite Group report suggests.

Aite Group senior analyst Christine Pratt has evaluated consumer and small-business default management software, a category that should be important to banks this year as they cope with distressed debt.

Pratt points out that nearly 8.4 million U.S. consumers have lost their jobs since the recession began, unemployment continues to hover around 10% and most are struggling to pay their bills. Retail loan balances are sinking, yet the numbers of loan accounts and the volume of work to be processed are not showing a significant decline. "Combine that with the staggering rise in delinquencies, charge-offs, foreclosures, and a processing IT landscape that is mature to the extreme, and it is not difficult to see why lender resources are significantly strained," she writes. "And that doesn't even include regulator's increasing demands for transparency in all processes."

In the report Assessing Top Software Solutions in Consumer and Small-Business Default Management Aite examines trends in consumer and small-business lending, defines default management software (it typically includes workflow management, a decision engine, and support systems with database, model base, and user interface elements) and profiles several vendors that provide it: Akcelerant Software, CGI Technologies & Solutions, CSC, FICO, Fiserv, FIS, Lender Processing Services, and Shaw Systems Associates.