The sale of non-performing loan (NPL) assets – mortgages, student loans, car payments or otherwise – can be a sizable undertaking for any financial institution. These transactions can be in the hundreds of billions of dollars if not more. With that comes documents and more documents. In fact, these types of asset backed securities sales can require the analysis and management of millions of files. This is no small task and certainly it’s something that requires extensive planning and infrastructure that’s up to the task.
Following are some questions to ask about your institution and its readiness to manage through a sale of NPL assets:
- Do you have a data room that can handle all of this information? When you’re talking about the millions of documents involved with asset backed securities, you need a system in place that can handle the massive amount of data storage this requires. And it’s not just about storage, but investing in a platform that has fast upload speeds, no limits to the size of uploads, and that is file type agnostic. While firms can invest in storage devices on this scale, it might not be an effective use of their capital or resources. This is why major financial institutions outsource these responsibilities to virtual data rooms. These providers have the ability to quickly scale up to meet the demands of any transaction.
- What will your upload and document management process look like? Determining your data storage needs for an NPL sale is one thing, but when you’re talking about the uploading, conversion, naming and management of millions of pieces of data, that’s an undertaking in and of itself. And there needs to be a strategy for doing so most effectively. Where is the information going to be housed? Who will have access? What will the architecture be like? Who will handle the administration? These are all important topics that need to be considered before beginning the process and selecting a virtual data room provider. VDRs like SmartRoom are more than just a “data room.” They provide a dedicated ABS project management team that works with you to understand your specific needs and develop a strategic process that cuts down as much time and effort as possible.
- How secure is your data? Data security is of the utmost importance for any business these days. One leaked piece of information, or worse yet, a hack, can delay or even compromise operations or a transaction itself. While some businesses continue to use FTP or file sharing platforms, these offer neither the security nor the flexibility of a virtual data room. NPL sales involve some of the most sensitive information, including critical information pertaining to consumer home loans. VDRs like SmartRoom guarantee that your information is protected by the highest levels of security and encryption. The platform provides administrators the ability to control view, print, save, and modify rights across large user bases so that you can streamline due diligence while ensuring absolute security. You can even place remote expiration controls on documents so that you can detonate them at any time.
- How can you streamline this process? With an NPL sale, there are so many stages from uploading the initial information to managing bid submissions to sharing them securely with thousands of potential investors. While it is crucial to develop an efficient process to upload data, it’s just as important to ensure the data is organized and easily viewable and accessible from the potential buyer prospective. This can require additional administration that involves the renaming and conversion of data into different file formats. Each of these additional steps can take a lot of time, money and effort if done manually, so it’s important to select a vendor that can help automate this process. With the right virtual data room, your business can save a lot of on each of these, potentially delivering a better result and higher margins. Vendors like SmartRoom work with you to develop a process that quickly and efficiently uploads, renames, and converts millions of files. SmartRoom also provides a custom portal to users so they can easily access and view all rooms they are invited to.
- Do you have a method or plan for measuring activity? Because an NPL sale can take years to transact and encompass dozens of separate rooms, it’s critical to have the tools in place to monitor activity on these seemingly endless documents. Furthermore, it needs to be able to generate reports with the analytics and insights to best run the deal.
For more information about how SmartRoom can help your institution and clients for an NPL sale, or any other major financial transaction, please visit www.smartroom.com.