How to Choose the Right Credit Card and Unsecured Loan Servicing Partner in an Evolving Market

According to the Federal Reserve, there were more than 648 million active credit card accounts in the U.S by the end of 2025* and servicing these accounts (and other unsecured loans) is no longer an operational function-it is a strategic priority across the entire customer lifecycle.

Whether a lender is looking to outsource servicing of its unsecured loan portfolio for the first time or considering a move to a new servicer, the decision carries significant weight. The right partner can enable growth, while the wrong one can be costly - both to customer experience and the bottom line.

Sharon Hill, executive vice president and chief revenue officer for CardWorks Servicing, has more than 30 years of experience in financial services and deep knowledge of the servicing industry. In this Q&A, Hill shares how the industry is evolving and what's most important for issuers and asset managers to consider when choosing a servicing partner.

Q: Sharon, you've been in this business for a long time. How has the role of credit card and loan servicing evolved in today's financial ecosystem?

A: Servicing credit cards and loans has evolved from a back-office utility to a strategic priority. Issuers and asset managers are coming to servicers for end-to-end capability: lifecycle management, regulatory rigor, data-driven insights, and customer experience that drives retention and profitability. The expectation is no longer execution-it's enterprise enablement.

Leading issuers and asset managers engage servicers to deliver scalable growth, regulatory certainty, and data-driven performance. The expectation is an integrated partner that can optimize credit outcomes, enhance customer engagement, and withstand regulatory scrutiny at scale.

Q: How have client needs changed? What trends are you seeing?

A: Client demand has consolidated around three imperatives: integration, intelligence, and compliance at scale.

• Platform convergence is replacing fragmented vendor stacks
• AI-driven decisioning is reshaping collections, line management, and engagement
• Regulatory expectations are intensifying, requiring institutional-grade controls
• Speed to market is now a competitive requirement, not a luxury

Clients are prioritizing partners who can reduce complexity while improving performance and control.

Q: How does a bank know when it's time to outsource servicing?

A: The tipping point occurs when servicing limits growth or elevates risk. Key indicators include:

• escalating compliance burden or audit findings
• constrained scalability or rising unit costs
• outdated or inflexible technology
• underperformance in collections or customer experience

Outsourcing becomes a strategic decision to de-risk operations, modernize capability, unlock growth capacity, and maximize portfolio performance.

Q: What are the top 5 considerations you advise portfolio holders to consider when choosing an external servicer?

A: I advise looking for the following capabilities:

1. Regulatory infrastructure - proven, scalable, and exam-ready
2. End-to-end capability - true lifecycle coverage, not fragmented solutions
3. Data & performance analytics - ability to actively improve portfolio outcomes and demonstrated success in doing so
4. Scalability & execution discipline - consistent delivery across complexity
5. Partnership model - alignment, transparency, and accountability at the executive level

Q: What about lenders that already outsource but are looking for a new servicer. What would you advise they look for that may be different from the considerations above?

A: A change in servicer is a strategic reset, not a vendor swap or a cost-cutting initiative. The decision should be grounded in measurable upside and long-term resilience. Lenders should consider:

• Conversion excellence - disciplined, low-risk onboarding with regulatory precision
• Demonstrated performance lift - clear path to improved yield, collections, and CX
• Governance & transparency - real-time insight, auditability, and control
• Future-proof platform - scalable architecture that supports growth and innovation

Q: CardWorks Servicing has been in the servicing business for almost 40 years. What sets us apart from others in the market?

A: What makes us different is we are a true operator-led, highly experienced, compliant, and fully integrated servicing platform. The following really stand out to me:

• Operator Advantage - built by experienced lenders; decisions grounded in real portfolio ownership and performance accountability
• Three-Pronged Model - CardWorks Servicing is the only solution that offers Account Ownership, Servicing, and Processing alignment delivering unmatched continuity and control
• Compliance-First Architecture - designed to operate in highly regulated environments with rigor, consistency, and audit readiness
• Performance Orientation - focus on driving portfolio economics, not just meeting SLAs
• Client Alignment - long-term partnerships where we operate as an extension of the issuer, not a vendor

To learn more about CardWorks Servicing, visit our solutions page: https://www.cardworksservicing.com/

*Source: Federal Reserve Household Debt and Credit Report Q4 2025.