Independent Audit Verifies Inovatec’s Internal Controls and Processes

Inovatec Systems Corp., a provider of industry-leading, for all financial institutions, today announced that it has completed its SOC 1 Type II and SOC 2 Type II audits, performed by KirkpatrickPrice. These attestations provide evidence that Inovatec has a strong commitment to security and to delivering high-quality services to its clients by demonstrating that they have designed the necessary internal controls and processes.

A SOC 1 audit provides an independent, third-party validation that a service organization’s information security practices meet industry standards stipulated by the AICPA and SSAE 18. During the audit, a service organization’s controls that are relevant to ICFR are tested. The SOC 1 report delivered by KirkpatrickPrice verifies the suitability of the design of Inovatec’s controls to meet the standards for these criteria.

A SOC 2 audit provides an independent, third-party validation that a service organization’s information security practices meet industry standards stipulated by the AICPA. During the audit, a service organization’s non-financial reporting controls as they relate to security, availability, processing integrity, confidentiality, and privacy of a system are tested. The SOC 2 report delivered by KirkpatrickPrice verifies the suitability of the design of Inovatec’s controls to meet the standards for these criteria.

“Each year, Inovatec takes extensive measures to protect the integrity, quality, and confidentiality of our customers’ data,” said Christian Reina, Information Security Officer at Inovatec.  “We adhere to the highest industry standards, ensuring the security and privacy of information in every transaction.”

“Many of Inovatec’s clients rely on them to protect consumer information and provide secure services,” said Joseph Kirkpatrick, President of KirkpatrickPrice. “As a result, Inovatec has implemented best practice controls demanded by their clients to address information security and compliance risks. Our third-party opinion validates these controls and the tests we perform provide assurance to Inovatec’s clients.”

About Inovatec

Inovatec Systems Corporation is obsessed with improving the outcomes for Lenders in the USA and Canada. As an industry-leading provider of cloud-based lending solutions, Inovatec's JAVELIN platform disrupts standard practice with Success Based Pricing. Success Based Pricing Means Lenders pay only for the transactions they book - a first for the industry.

About KirkpatrickPrice

KirkpatrickPrice is a licensed CPA firm, PCI QSA, and a HITRUST CSF Assessor, registered with the PCAOB, providing assurance services to over one thousand clients in North America, South America, Asia, Europe, and Australia. The firm has more than a decade of experience in information security by performing assessments, audits, and tests that strengthen information security practices and internal controls. KirkpatrickPrice most commonly performs assessments on SOC 1, SOC 2, PCI DSS, HIPAA, HITRUST CSF, GDPR, ISO 27001, FISMA, and FERPA frameworks, as well as advanced-level penetration testing. For more information, visit www.kirkpatrickprice.com, follow KirkpatrickPrice on LinkedIn, or subscribe to our YouTube channel.

Automatic Document Indexing Will Drastically Increase Transaction Accuracy and Speed for Financial Institutions

BURNABY, BC (January 25, 2021) - Inovatec Systems Corp., a provider of industry-leading, cloud-based software solutions for all financial institutions, announced today its JAVELIN platform now offers OCR (Optical Character Recognition) for automatic document indexing and sorting. The OCR technology uses custom-built AI machine-learning to allow financial institutions and lenders to sort incoming documents at any hour. The OCR function will save approximately three to five minutes of manual sort time per transaction with accuracy while maintaining current funding processes. For lenders processing thousands of loans at any given time, the OCR feature saves significantly on valuable working hours.

The feature encompasses three different phases:

Automatic Document Indexing includes automatic document indexing and sorting through custom-built artificial intelligence (AI) machine learning. The automatic document indexing feature allows sorting of incoming documents 24/7 while maintaining speedy and accuracy.

Meta Data Validation takes the next step in validating crucial data for funding. This data validation allows financial institutions to “automatically fund” using data analytics. By isolating the necessary data elements for funding, a transaction can automatically be completed using validations that align with lenders current processes.

Auto Fund is the process that completes the journey to Automated Funding by taking a submission or automatic approval to funding without human touch.  Inovatec is the first and only technology provider to offer Automatic Funding as part of their LOS offering.

Benefits of an OCR-capable system:

• Decreased Funding turnaround time and head count required for Indexing and Data Validation.  Use those FTE to fund or adjudicate more deals.
• Increased efficiencies through automated solutions. Get a completely paperless environment through Digital Document from any source (fax, text, email). 100% accurate validations.
• Increased customer satisfaction through faster automated status communications to and from the originating portal. Expose missing or incorrect data and documents.

“Providing the most accurate data for our customers while helping them to save in a quantifiable and scalable way always been a fundamental value at Inovatec,” said Brendon Aleski, US Director of Sales at Inovatec. “We are constantly improving and perfecting our product offering to include proprietary modules, analytics and cutting-edge machine learning capabilities that become smarter with each transaction.”

JAVELIN by Inovatec is a state-of-the-art lending platform that helps lenders select the right deals, while only paying for deals that are booked. Inovatec’s solutions improve overall efficiency in areas that would take lenders hundreds of working hours to process, file, organize and approve applications. 

To learn more about Inovatec and its complete suite of lender-centric technologies please visit www.inovatec.com

About Inovatec

Inovatec Systems Corporation is obsessed with improving the outcomes for Lenders in the USA and Canada. As an industry-leading provider of cloud-based lending solutions, Inovatec's JAVELIN platform disrupts standard practice with Success Based Pricing. Success Based Pricing Means Lenders pay only for the transactions they book - a first for the industry.

Many automotive lenders face challenges today associated with maintaining compliance in all facets of their business. Automotive loan compliance requires knowledge of federal regulations the govern applications, processes and practices. While it can be assumed lenders strive to remain compliant to the rules and regulations that govern them, remaining compliant can become a struggle if regulations are interpreted incorrectly.

There’s no question that automotive loan compliance is top of mind for almost if not all lenders today. National legislation regarding privacy and consumer financial information changes frequently. At the Federal level, automotive lenders are governed by the Federal Trade Commission (FTC) and the Office of the Comptroller of the Currency for banking. What’s more, several states have introduced local legislation to govern automotive lenders and their practices. Specifically, Maryland, Pennsylvania and Virginia already have consumer financial protection unit’s in place.  In January of 2020, both California and New York announced they were looking to follow suit.

In order to remain compliant, automotive lenders must understand which regulations affect them prior to taking the necessary steps to implement precautionary measures. Legal counsel must actively play a role in the interpretation of regulations as well. Among the many automotive loan compliance regulations that affect lenders, there are four that stand out.  The Equal Credit Opportunity Act (ECOA), the Servicemembers Civil Relief Act (SCRA), The Truth in Lending Act (TILA) and the Unfair, Deceptive or Abusive Acts and Practices (UDAAP). 

A breakdown of each includes:

• The Equal Credit Opportunity Act (ECOA) prohibits applicant creditworthiness discrimination based on race, color, religion, gender, marital status or age. Lenders are required to notify applicants regarding any decisions made on their application and collect information for government monitoring.
• The Servicemembers Civil Relief Act (SCRA) protects active military from foreclosures or property seizures. Military members have the option to terminate an existing vehicle lease if they are deployed over 180 days and are further entitled to interest rates under 6%.
• The Truth in Lending Act (TILA) states that lenders must disclose details such as cost of loan, monthly payments and interest rate in writing to the consumer.
• The Unfair, Deceptive or Abusive Acts and Practices (UDAAP) protects consumers from any situation where a they may be intentionally misled in a financial situation.

With so many regulations governing lenders and ongoing legislative changes, how can automotive lenders remain compliant? The answer is found in automotive lending technology systems that are designed to give transparency, provide analytics tools, automate and store digital documents. All of which are pertinent to maintaining compliance as regulations quickly change. 

Modern automotive lending technology systems have AI capabilities that allow for a deeper dive into patters of behavior that may identify an applicant as high risk.  For example, if an applicant has a lower credit score, they may traditionally be a risky decision to that lender.  However, AI is allowing for lenders to identify which individuals within a credit score group may perform worse than others if the credit score is not the only factor. AI looks at a complex set of data and circumstances that can combine dozens of factors rather than just one factor such as credit score.

These AI systems can create a set of automated “rules” to follow that measures applicants based on specific criteria, allowing for a quicker non-biased decision on each applicant. This further helps the lender remain in compliance with the above regulations such as ECOA and SCRA by removing the human element. For example, if an applicant has a credit score lower than 600, a rule can be written to evaluate their creditworthiness based on alternative credit data and factors. If an applicant is active in the military, the loan can be structured around the SCRA regulations through Artificial Intelligence systems. The rules in this case are more human driven than AI controlled, where the AI element is beneficial for harder to spot circumstances that may be less obvious.

Furthermore, automotive lending technology can help lenders prove their compliance by recording decisions.  If a lender is to be audited, the lender can show how their applications and decisions are processed and executed internally.  While the system rules are designed to make decisions with specific outcomes in the lending process, the automation factor executes the action of approval or denial on a loan. This ensures that there are no missed steps in the application process, and essentially eliminates human error from manual processes. Using AI functions can create a more tailored outcome specific to the needs of that particular lender.

Not only can compliance be proven and maintained through automation, but credit decisions can be made almost immediately. An applicant with a high credit score may be approved within seconds, eliminating the need for time-consuming review on an applicant who the lender is going to approve regardless. 

In years past, lending regulations have been focused on direct communications between borrowers and applicants, many of which were completed through a paper trail. Today, digital management of documents and communications eliminates the need for written documentation that can easily be misplaced or lost at any given time. Sensitive items such as social security numbers, credit score disclosures and borrower decisions can be securely stored and accessed if compliance is questioned. From a compliance perspective, it becomes easier to prove that legislation has been followed as required. 

Another benefit seen by incorporating automation into lending practices is the ability to leverage analytics. Analytics only further help demonstrate that a lenders processes and policies comply with regulatory laws as well as improve efficiency. Analytic tools make it easier to understand where processes are slower, giving lenders the opportunity to improve in those areas.

While no automotive lending technology system will meet every facet of a lender’s needs, many can be integrated with systems such as Salesforce, and all add consistency and compliance transparency throughout. All documentation, rules, and decisions will always be stored as part of an automated underwriting process and stored digitally. Auto loan compliance requires continuous monitorization and interpretation of regulations.  The more automation that is incorporated into lending practices, the easier it is to demonstrate and remain in compliance.

Today’s leading financial institutions in the United States are investing millions[1] into updating their capabilities through the use of artificial intelligence (AI). Automation affects almost every industry today in one way or another.  More specifically, the mortgage industry continues to see change in regulations and compliance, increasing the need for stronger processes in internal and external systems.

Many of today’s mortgage firms are realizing that they have missed the mark in their processes and internal systems, specifically as artificial intelligence capabilities increase. In most of these organizations, there are many disparate management systems that are used internally throughout the lending process to simplify and organize documents and records.  There may be a system used by the accounting department to manage finances and transactions, another system used by the marketing department to increase lead generation, and another LOS (Loan Origination System) used for processing documents.

Many organizations face difficulties in streamlining these processes, blending all facets together as one unit.  The accounting system, the marketing system, and the LOS system are all independently run, with no connection to each other. Each system in itself works to be customer-centric to provide a more positive customer experience before and after a transaction is completed.  However, processing systems would actually be more customer-centric if they were interwoven.

For example, the accounting system runs independently from the LOS system, and both may store their data in a singular data warehouse that ties all functions together.  Yet, these systems are tied together only at a data level, not at an operational level. Because they are tied at a data level, it’s nearly impossible to find status on documents and mortgages in real-time.  If the systems were tied at an operational level, anyone in any department could pull a real-time status update for a customer, allowing for quicker decisions and better customer service.

The development of artificial intelligence tools is enabling new systems to be completely process oriented. All functions can be tied together creating a transformative system that can be utilized for years to come.  While some organizations maybe taking full advantage of advanced AI technology integration, others are simply upgrading the technology they currently use.  Essentially, allowing for very little organizational change and “doing what one’s always done” just in a faster way.   Mortgage companies that excel in their processes understand that small upgrades simply do not provide the same level or organizational transformation that a complete process management system enables.

Not only does the integration of a process management system improve internal efficiencies for mortgage lenders, but AI digitalization offers lenders an opportunity to engage with their customers on a more personalized level, encouraging stronger customer relationships by using AI to enhance their experience. For example, some process systems will allow for lender customers to log in and view actionable items themselves, rather than requiring a customer to call or email their lender.  The same system can allow for customers to upload documents and necessary items directly through a portal, which can be placed directly into the process management system rather than requiring the customer to scan and email documents, and then requiring internal personnel to upload them. Not only does this better serve the customer, but quickens the process internally for lenders.

Furthermore, the standardization of processes helps mortgage lenders to stay in compliance with ongoing regulations. With updated AI systems, legal documents can be more easily found and organized. By improving the way documents are held in a secure environment, there leaves little room for error. This is especially true with systems that have the capability to flag the lender when they are missing legal necessities in a document, such as a signature.

In conclusion, standardization of processes utilizing AI can help mortgage lenders to provide better customer service, increase efficiency, and save money over time.  Rather than making simple and costly upgrades to separate existing systems, using a business process management system with integrated artificial intelligence that connects all systems into one will significantly improve operations for mortgage lenders.

https://www.businessinsider.com/bank-teller-automation-on-the-rise-with-new-atm-technology-2017-6

It’s no secret that for years consumers have been privately listing their vehicles for sale on sites like Autotrader, Kijiji, Cars.com and more. In fact, according to the NIADA Used Car Industry Report[i], approximately twelve million cars were sold through private party sales in 2018.  With an increase in used-car sales[ii], it can be assumed that private-party consumer-to-consumer sales will also increase.  And while millions of consumers have sold their cars online, they’ve always been at the mercy of their buyer arranging financing in order to complete the deal. New technologies today may be changing this in the consumer’s favor.

While many technological capabilities are now available to dealerships, lending technology historically remained limited for consumers looking to sell their own vehicle.  In a private sale, the buyer must secure their own financing independent of the seller, either through their own bank or private party lender. However, there is always a chance that the buyer’s funding may not get approved- requiring the seller to find a new buyer. What’s more, privately selling a vehicle often-times opens sellers up to many risks including theft, misrepresentation and fraud.

A new series of technological advancements has changed this. Lenders today are looking to offer a more effective solution for consumers in both a buying or selling situation.  The process starts when a seller lists their vehicle for sale on a website that supports automotive resale. Through lending process management technology, the seller would have the ability to offer their vehicle for sale with financing options that are backed by a lender.  Thus, allowing the buyer to work directly with the lender to purchase the vehicle, without securing financing through an outside vendor source.

Furthermore, because of technology available today, listing aggregating sites such as Autotrader or Cars.com can offer, connect and facilitate lending options to their customers who are selling vehicles on their website. This allows the seller to offer financing directly to the buyer, all made possible through an AI powered software platform that is integrated through the site itself. Not only does this increase customer confidence in the sale, but overall customer satisfaction as well.  This technology is enabled through loan origination software that builds out a loan based on a variety of factors, allowing for this “consumer-to-consumer” transaction to occur.

An additional benefit of this process is that buyers can have more accurate conversations with lenders about their finances and vehicle affordability.  When the buyer is working directly with the lender, they may feel more secure disclosing discrepancies in their finances, rather than providing that information first to a dealer who reports the information back to the lender. Often, when a consumer enters a car dealership, selects a vehicle, and sits down to go through financing, the financing aspect takes the longest amount of time.

Over the past few years, it’s evident that buyers today do not want to spend hours at the dealership shopping and sitting in the finance office. Websites such as Carvana and Vroom that promote buying and financing cars online are increasing in popularity, likely because of convenience. With new options available for buyers and sellers at the consumer level, more consumer-to-consumer transactions can occur.

Through automation and lending technology provided by a loan origination software system, consumers can have a more honest and direct conversation with the lender.  Consumer income, dependability, and credit history can more accurately be depicted leaving less room for unaffordable loans in which consumers often default. Automation technology allows for more reliable and secure transactions to occur at the consumer-to-consumer level, increasing private-seller appeal for automotive buyers.

Overall, the implementation of AI driven lending technology will certainly reshape the way consumers transact with one another, as well as the way consumers transact with lenders. It’s possible that such technology will also lead to an increase in consumer-to-consumer private party deals, with more secure transactions leading to customer confidence.

[i] https://www.niada.com/uploads/dynamic_areas/ei5l4ZznCkTc8GyrBKd6/34/UCIR_2018_Web.pdf?

[ii] https://www.autoremarketing.com/ar-categories/sales-reports