A mortgage implementation involving the migration of a £4billion CHL mortgage book.

1. The Challenge

Capital Home Loans (CHL) wanted to better service its borrowers, reduce its level of risk, increase efficiencies and improve customer outcomes.

Its solution was to transfer to Phoebus’ single platform, mortgage servicing solution.

Switching to the Phoebus system involved the migration of the entire CHL mortgage book comprising 57,000 accounts worth £4billion onto a single platform. This would incorporate a number of historic systems and eliminating a number of manual processes.

Migrations, particularly of the scale of the one that CHL undertook, are deemed very high risk, but the risk was minimised as it is an area that PSL are recognised specialists in.

2. Objectives

CHL had a number of key objectives:

To improve efficiency
The objective behind the migration was to enable CHL to streamline the majority of its processes, making the whole process of servicing its mortgages quicker and slicker.

To increase profitability
One objective behind the single system solution was to reduce the amount of manual intervention, reducing the number of staff involved on particular tasks, in order to both decrease costs and increase profitability.

To improve customer service
To free up staff from manual tasks to focus instead on helping those customers that really need additional help and support.

To reduce the level of risk
Phoebus allows a greater volume of processes to be carried out within its system without the need for so many third-party databases. This mitigates against execution risk such as user error and creates staffing efficiencies, as fewer staff are required to carry out the more mundane tasks.

To reduce errors
A number of areas of CHL’s business were previously manually intense which could lead to errors. The objective for the Phoebus system was to automate many of the processes, making them quicker and more accurate.

To enable securitisation
CHL wanted its system to enable the securitisation of all or parts of its mortgage book in the future should this be the right thing to do. It therefore needed to ensure all of the accounting and reporting requirements from such a business critical area were handled compliantly.

3. Results

PSL created a loan migrations API enabling CHL to undertake the migration of its mortgage books onto the Phoebus servicing solution, from any account servicing platform. This automated interface enables migrations to take place over a weekend, keeping system downtime to a minimum and ensuring the customer experience was not affected.

The migration to the Phoebus system went live ahead of schedule and was delivered inside budget. The move to Phoebus met all of CHL’s objectives and more and instantly started to produce significant and tangible results.

In addition, as a purchaser of mortgage assets, PSL’s migration API will bring great ongoing and future operational benefits to CHL as it will be reused to migrate other books onto Phoebus servicing.

Dramatic cost savings
The results of moving to Phoebus have been dramatic. It has resulted in more than 20% cost and efficiency savings for CHL, enabling it to reallocate staff across the business; this will further improve CHL’s productivity and profitability.

In addition, CHL is making like-for-like platform cost savings of at least 30% annually, compared to its previous system.

Single platform efficiencies and improved customer outcomes
PSL successfully migrated all of CHL’s mortgage book onto a single Phoebus workflow platform. In doing so they eliminated a number of manual workarounds, which had been require by CHL’s previous system provider.

The Phoebus system enabled the introduction of real-time statement production and other functionality not previously available. CHL has also been able to automate a number of letters which were previously manually-produced. This was particularly beneficial within the maturing loan team enabling the team to focus instead on assisting borrowers with their exit strategies.

Workflow management and staff training
The PSL platform enabled CHL to introduce effective workflow management. The Phoebus system monitors all CHL accounts serviced on Phoebus and only notifies users on cases they need to deal with.

The workflow system has enabled CHL to create a highly automated account servicing environment, creating operational savings. This has made a significant difference in key areas, such as a targeted focus on vulnerable customers or those in financial difficulty. This has meant a better experience for customers and will result in a greater number of customers having a successful resolution to payment difficulties.

These efficiencies, created through use of the workflow and automated letter programme, has also freed a number of staff to be cross-trained so they can now be both proactive and reactive to customer needs. This has improved outcomes for customers but also helped with staff development and progression.

Successful integrations and APIs
PSL developed of a suite of application programme interfaces (API’s) developed to open banking standards. This enabled the interface of CHL third-party systems with Phoebus’ servicing solution allowing real-time transfer of customer data while enhancing the experience for the borrower and the CHL end user.

PSL also enabled additional integrations with CHL’s other suppliers including its: card payment provider, general ledger, document management and data warehouse solutions. This has provided a seamless operational solution.

Securitisation
CHL will be actively looking at securitising mortgage assets as this market continues to recover, therefore PSL invested in its securitisation module. It now allows PSL clients to carry out securitisations efficiently should they wish to do so. Phoebus gives CHL far greater control in relation to the securitisation rules it may needs to apply, and provides cost savings where bespoke reporting is required. It also ensures all the accounting and reporting required by a securitisation are compliant and up-to-date.

Future-proofing
PSL has enabled CHL to future proof its business with a scalable platform that can support its business strategy.

Ongoing enhancement of the Phoebus platform is managed through an ongoing partnership being CHL and PSL in line with a well-defined road map and delivery schedule.

Summary
This project is testimony to PSL and CHL working in partnership to deliver a very successful outcome. In working with CHL, the pedigree of the Phoebus primary and special servicing functionality assisted CHL to achieve its major strategic objectives on the highly-scalable Phoebus platform.

Migrations, particularly of the scale of the one that CHL undertook, are deemed very high risk, but it is an area that PSL are recognised specialists in. The success of this migration has achieved numerous positive outcomes for CHL across all areas of its business, improving efficiency, profitability and customer service.