Royal Bank of Canada Uses Credit Revue for Indirect Auto Lending
8 September 1998
Royal Bank of Canada to Enter Indirect Auto Lending Arena; CMSI's CreditRevue Plays Key Role in Building New Business and New Revenue Stream
COLUMBIA, Md., Sept. 8 -- Credit Management Solutions, Inc.
(CMSI) announced that Canada's largest bank, Royal Bank of
Canada (245 billion Canadian), has implemented CMSI's CreditRevue(R) 2000
UNIX-based software system to support the bank's indirect automobile lending
services.
Indirect lending allows customers to finance their automobile purchases
directly at the dealership rather than at a bank branch. CreditRevue
automates the indirect lending process by retrieving credit reports, scoring
applications, booking loans, and printing loan checks. In addition,
CreditRevue provides loan analysis and risk management capabilities.
According to Alberta Cefis, Royal Bank of Canada's Vice President of
personal credit services, "Indirect lending will be a revenue producer and
asset builder for us." Cefis explained: "Consumers are increasingly looking
to finance their automobile purchases directly at the dealership rather than
at the branch. Our newly established indirect lending business will provide,
an opportunity to meet both our customers needs as well as build very
profitable balances."
Because indirect lending represents a significant component of the bank's
business strategy, it was critical that Royal Bank enter the indirect lending
business as quickly as possible. Installing CMSI's CreditRevue, rather than
developing their own system, allowed Royal Bank to meet their speed-to-market
criteria. Building a system from scratch "would have taken substantially
longer, cost more, and would not have been based on a proven technology and
platform," said Cefis.
Automating the indirect lending process for both the dealer and the bank
is critical to successfully enter this new business. "If we didn't have
CreditRevue, we couldn't guarantee the service levels and the quick turnaround
to the dealers that we need to be competitive," said Cefis. CreditRevue
allows Royal Bank to provide dealers a lending decision in two hours or less,
she said.
Although Royal Bank has been using CreditRevue only since May 25, they are
already reaping benefits, said Suzanne Haddad, Vice President of indirect
lending systems. A major benefit is the system's loan tracking ability which
helps the bank better manage their indirect lending business. For example,
Royal Bank uses CreditRevue to analyze the quantity and quality of loan
applications by dealer.
Another major benefit of CreditRevue is that Royal Bank can support the
high volume of loans that indirect lending will generate. Cefis estimates
that each loan processor in their dealer finance center will be able to handle
50 to 100 applications per day with CreditRevue, compared with only 8-12
applications per day without CreditRevue.
As CMSI's first Canadian customer, Royal Bank required additional
customization. For example, in addition to providing an interface to the
bank's backend legacy systems, CMSI built interfaces to Canadian TransUnion
for credit reports and the Canadian Black Book for automobile valuations.
CMSI also customized the system to allow Royal Bank to offer the Royal Bank
Car Loan, a specialized product which Haddad said is similar to leasing.
"CMSI was supportive for requests for customization," said Haddad, calling the
partnership between CMSI and Royal Bank "collaborative."
"Partnering with Royal Bank of Canada extends CMSI's reach to the
international marketplace for the first time," commented James DeFrancesco,
CMSI's President and CEO. "We're pleased that Royal Bank of Canada chose
CreditRevue to help facilitate its quick entry into indirect lending very
quickly and contribute to the growth of this new line of business."
Royal Bank is Canada's premier global financial services group and a
leading provider of personal and business banking, corporate and investment
banking, and wealth management services. As one of North America's largest
financial institutions, Royal Bank and its key subsidiaries Royal Trust,
RBC Dominion Securities, RBC Insurance and Royal Bank Action Direct have
50,946 employees (on a full-time equivalent basis) who serve 10 million
clients through more than 1,500 branches and offices in 36 countries.
Founded in 1987 and headquartered in Columbia, Maryland, Credit Management
Solutions, Inc. provides consumer credit automation and loan
marketing software and services to major financial institutions and non-bank
financial companies. Its flagship product, CreditRevue, is a credit
origination and processing system used by financial institutions to automate
and speed the processing and decisioning of all types of consumer loan
products. CreditRevue clients include NationsBank, Banc One, Wells Fargo,
Comerica, Wachovia, and WFS Financial, among others. In July 1996, CMSI's
subsidiary, Credit Connection, Inc., introduced the CreditConnection(C), a
combined electronic network and service which electronically connects auto
dealers with multiple financing sources for the submission and decisioning of
loans and leases.
Press releases and other CMSI information can be found on the company's
Web Site, http://www.cmsinc.com
This press release contains forward-looking statements. All
forward-looking statements involve risks and uncertainties, including, without
limitation, the risks detailed in CMSI's filings and reports with the
Securities and Exchange Commission. Such statements are only predictions and
actual events or results may differ materially.