The ICE-Black Knight Merger Spells Opportunity for Servicers. Here's How to Seize It

Intercontinental Exchange (ICE) and Black Knight's $11.7 billion merger is still sending shockwaves through the mortgage industry – especially among servicers using Black Knight's MSP software. 

We can't predict how the new ownership will impact MSP features, functionality, and support. The change creates uncertainty for servicers using MSP but may create opportunities, too.
If you currently use MSP, it's a great time to step back and define what you want from your servicing technology so you can intentionally choose a provider that makes all that possible. In this piece, we'll explain how to do that.

Background: Why Servicing Technology Is an Existential Matter

It's no secret: the purchase market is still in a slowdown. Despite recent rate declines, the vast majority of current borrowers have lower rates than those offered today. That’s a significant number of individuals who might opt to postpone their home selling in anticipation of even lower rates to buy their next homes. 

A robust servicing operation will be vital to maintaining a positive cash flow as long as current conditions persist. But that requires powerful servicing technology. And with the most prominent player now under new leadership, it's still being determined what direction MSP will take to modernize its capabilities, offer competitive pricing, or bolster its customer support.

The good news is that this industry shake-up is an excellent excuse for servicers to decide whether MSP still meets their servicing needs. That starts by understanding what modern servicing technology can (and should) accomplish.

Define What You Want From Your Servicing Technology

Most MSP customers are used to platform features like real-time compliance management, robust data security, and an intuitive borrower portal. 

In today's market, these features are table stakes: the best servicing technology can do all that and more. Best-of-breed software can empower servicers to do much more via features like…

A self-service borrower portal for submitting documentation, making payments, viewing payoff estimates, etc. Borrowers love being able to manage their most significant investment anytime, anywhere, and servicers love that this tech makes it possible without additional headcount.

Configurable loss mitigation management tools that offer empathetic support for customers while streamlining complex backend communications: sending offers, managing deadlines and signatures, tracking outcomes, and updating stakeholders.

AI-powered workflow automation to boost staff productivity.

Real-time data sharing between self-service portals and your servicing system.

To gauge what kind of ROI these features might deliver to your organization, take some time to define your servicing pain points and identify the digital capabilities that best satisfy your needs. For instance, if you've overstretched your servicing staff, you'll likely value expanded self-service options and workflow automation. 

Beyond that, today's best servicing technology can also turn a servicing portfolio into a rich source of customer leads for products other than purchase loans you don't have to pay for. 
That will be the key to surviving the current market for some servicers. Let's take a look at how it works.

Understand How Servicing Platforms Can Power Lead Generation

Here's the simple math behind tapping a servicing portfolio for leads: when you can intelligently sell to your existing customer base, you don't have to pay for leads. This strategy is crucial during a down market cycle when there aren't enough leads to buy in the first place.

Of course, that doesn't mean there aren't people you can sell lending products to. But because most borrowers don't understand the variety of products, the chances of them proactively seeking those solutions – and therefore becoming inbound leads – are low.

Enter servicing tech. Your solution should be able to mine customer data for various characteristics. One of the most significant opportunities is helping customers tap into their equity as a source of cash, as American homeowners are sitting on trillions in equity. And if they need money to finance a renovation, a new car, or a child's education, they might get better rates through a HELOC than any other credit product.

Your servicing technology should be able to generate a list of customers for loan officers to reach out to with messaging around HELOCs (or home equity loans or other relevant products). If it can't today, it's time to consider alternatives.

Crucially, this capability can serve you in any market. Two years ago, servicers could leverage their portfolios to discover traditional refinancing opportunities. No matter the industry environment, the right platform can help servicers find the gold at the heart of their portfolio data.

Some off-the-shelf MSP competitors offer this capability (along with everything we outlined above). But if this article has you dreaming up even more features, you might be a candidate for building a custom solution. Either way, MSP's new ownership creates a perfect opportunity to determine what you want from your servicing technology – and how you'll get there.

Never Waste a Good Opportunity

Servicers using MSP are enduring a disruption in their core technology. But this change doesn't have to be a bad thing. 

While the dust settles, servicers can assess whether they're comfortable with the status quo or want more from their servicing platform. And in a space where software decisions last decades, this choice could be one of the most important ones for years to come.

Tim Von Kaenel is Chief Strategy Officer at CI&T, a global digital specialist. CI&T’s Financial Services team specializes in customer experience management, mortgage operations, real-time payments, open banking, banking-as-a-service, and asset and wealth management.

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