For Discover, it pays to outsource--at least for online origination of home equity loans.
Discover Financial Services, a Riverwoods, Ill. business unit of Morgan Stanley, will rely upon PNC Consumer Services, Pittsburgh, Penn., for origination of its home equity lending product, including hosting of the web application, managing the call center and sending direct mail.
PNC's Pittsburgh-area loan center has 700 people, including a call center with roughly 300 people. As such, they handle consumer lending functions for several large lenders, now including Discover. "PNC is really in the background, back-office operation for them," said James DeFoggia, senior vice president, PNC Consumer Services. "This is completely an outsourced environment."
From the consumer's perspective, it's a seamless online transition. "When you're on the Discover Card site, you're then linked over to the area we host on the site," said DeFoggia. "The end customer sees the DFS name in front."
Providing a multi-channel experience, PNC's call center also handles questions and problems for Discover customers. It's also an outbound call center, responsible for making follow-up calls to close new loans.
But no matter how much of a hand PNC has in finding and closing deals, Discover still has a strong role in the decisioning process. "Discover owns the assets, and dictates the credit policy to us," said DeFoggia. "They dictate the risk tolerance."
For loan decisioning, PNC uses AMS Strata software. "We use that product across all of our relationships," said DeFoggia. "Each one has its own credit policy, its own risk tolerance and its own risk structure."
PNC also has servicing relationships with American Express, E-Trade, Prudential Financial, Amicus FSB and NetBank.