David Johnson, CEO and Founder, Vervent
Case study: How Vervent c-suite pioneered the new normal through Covid
Life, business and the economy have all succumbed to numerous changes throughout the ongoing impact of Covid-19. Lending-as-a-service powerhouse Vervent is no exception. But where others have buckled in the face of significant challenges, Vervent, steered confidently by CEO and founder David Johnson, has navigated the pandemic without halting operations and expanded its competitive footprint with the acquisition of Total Card, Inc., now Vervent Card.
Johnson credits three key factors to Vervent’s success in 2020: strong foundations, cohesive leadership, and taking Covid seriously from the beginning. “In March, Vervent’s leadership decisively outlined its three top priorities for moving forward through the looming uncertainty,” he said. “We wanted to keep staff and their families healthy and safe, provide financial stability – keep paychecks coming – for all Vervent team members, and ensure Vervent actively continued to support its clients and their customers.”
Under the guidance of Vervent’s savvy executive leadership team, each department head brings a unique perspective to daily operations, company vision, and pandemic responses. The collective impact exponentially exceeds each individual contribution, enabling Vervent to accelerate, and guide the industry, into the new normal.
From the operational perspective, Stephanie Jimenez, who previously served as COO for the entire enterprise, confronted the challenge of maintaining business operations in uncharted territory by relying on more than 25 years of financial industry infrastructure experience and prioritising transparency with the Vervent team.
In March, she and her team spearheaded Vervent’s largest operational pivot, restructuring its delinquency management protocols. Using data to forecast the pandemic’s possible effects and a deep understanding of customer support cycles, the operations team strategically adjusted support to concentrate and differentiate servicing activities based on delinquency classifications. (Previously, agents provided service across the life of a loan or lease.) This targeted approach positioned Vervent to acclimate to the increasing volume of deferments, offer more personalised customer service, educate customers who were inexperienced with being delinquent, and proactively deliver analytics and insights to clients as the pandemic evolves.
As a result, we are producing higher rates of scheduled payments and capturing stronger data to help predict future payment patterns as the capital markets again begin to function more smoothly. With the economic rollercoaster, we also see an increased need for credit at every socioeconomic level, particularly among the credit challenged. As such, Vervent has introduced Vervent Card, using its stellar reputation for high-quality service as a significant player in card servicing and origination.
A critical element of maintaining service for clients is the prioritisation of staff health and safety. Jimenez said, “One thing the pandemic didn’t change is that our people are still our first priority. Running ambitiously forward to address Covid head on, we prepared to handle historic levels of loan and lease modifications with less manpower as we implemented strict capacity restrictions in our operations centres. In-office capacity has been reduced to a 20 per cent maximum and telecommuting is used where possible. For staff who are not able to telecommute, we enacted split-shift scheduling with reduced hours for each team member, while maintaining whole paychecks.”
We also made safety adjustments to our operations centres above and beyond US Center For Disease Control (CDC) recommendations, including strict social-distancing policies, increased cleaning protocols, no-touch biometric access, and additional workplace tools, such as Microsoft Teams, to facilitate collaboration while minimising interpersonal exposure.
With the need for social distancing, Covid has made technology and virtual interconnectivity paramount to operational success. CTO Brad Herbison spearheaded Vervent’s IT security and technology advances with a two-fold approach: upgrade 24/7 virtual security for our operations centres and bring additional IT resources in house. While our security posture and defences were already multi-layered, robust and constantly adapting, Covid catalysed enhancements to the granularity of our access controls as we implemented new employee schedules and work-from-home arrangements.
“You can test your plans in a controlled environment, but you can never really prepare for the widespread effects of a pandemic,” Herbison said. “Ultimately, it’s rewarding to see that we proved our concept and our security was airtight. We used the opportunity to upgrade our 24/7 virtual security operations centre to one of the industry’s heavy hitters and bring additional IT resources in-house to meet the support requirements Stephanie [Jimenez] brought to the attention of the leadership team. It’s a perfect example of the decisive action and thoughtful impact Vervent uses to guide the industry.”
The need to erect a new supplemental operations centre to accommodate increasing support volumes and changing governmental regulations was an additional challenge faced by Herbison’s information technology department. “As we watched pandemic responses unfold across Europe, it was impossible to predict how our nearshore operations would be affected, despite our Baja operations center being part of the greater San Diego metro area along with our headquarters,” he said.
Illustrating Vervent’s commitment to speed, our temporary operations centre extension, Vervent Convoy, was developed, becoming fully operational within 30 days. From facilities construction to creating IT infrastructure and onboarding new agents, every department efficiently shouldered its responsibilities in this exceptional feat of collaboration.
While local government and health officials required most Mexican businesses to close for nine weeks, Vervent Baja ultimately remained online for the majority of the pandemic. We used our existing scalability in conjunction with the new Convoy expansion to employ stringent health and safety protocols to keep agents online, maintain service for our clients and do our part as a critical infrastructure business.
The timing of the pandemic housed further complications for Herbison’s team. In addition to finalising the technological systems integration required by the 2019 First Associates acquisition of PFSC to create Vervent, it was necessary to consolidate our SOC audit – the first occasion certifying the legacy companies together under the new entity.
Keeping employees afloat financially largely fell to CFO Dhruv Vakharia. “Once the leadership team agreed on the company’s priorities, the key was to act quickly,” he said. “Thankfully, speed is part of Vervent’s DNA. In finance and accounting, we pivoted to put cash first. We turned over every stone for waste and amplified our discipline on spending.”
Disciplined spending does not mean downsizing. Vakharia echoed Jimenez’s dedication to the Vervent family. “Our people are our greatest asset and keeping our staff whole is worth the expense,” he said. “In addition to being conscientious, retaining our highly trained employees pays countless dividends. It allows us to build loyalty, avoid costly turnover and forge ahead with an experienced team, whereas our competitors who were forced to let staff go will need to spend time, and lose efficiencies, staffing back up.”
We immediately invoked a cash-forecasting tool to help determine long-term options and their respective possible outcomes. We made educated investment decisions that positioned Vervent to endure the pandemic’s emergency response phase and emerge stronger, including nearly doubling staff and broadening our spectrum of products with December’s acquisition.
Covid-19 has drastically altered the financial landscape for businesses and consumers alike. “Consumers are propped up by stimulus money, and we’re surprisingly seeing debt being paid down,” said Vakharia. “The uncertainty emanates from the unknown end and inconsistency of federal backstopping, and we simply don’t know what the economy will look like when that happens.”
We’re industry leaders for a reason
Vervent’s intellectual horsepower, drive and determination has fortified us to weather any storm, including this one. “Crises either bring people together or tear them apart,” said Johnson. “Through Covid, Vervent grew stronger than ever.”
“Our executive leadership team bonded significantly, with each member gaining profound, valuable insight into other departments,” he continued. “As a result, collaboration and transparency flourished, showing the strength of our executives as a team and allowing us to accelerate faster and grow stronger in the face of adversity.”
Vervent closed 2020 on a high, pioneering growth in the lending-as-a-service ecosystem and expanding its services with Vervent Card. Driven by increases in demand for consumer credit, continued technological advancements, and trends towards outsourcing, huge growth is expected in the loan servicing business over the next five years, and Vervent is poised to lead the way.
Vervent acquires Total Card to further accelerate and expand client solutions: www.vervent.com