The mortgage industry is undergoing sweeping changes on operational front. This stems as a direct consequence of the unrestrained competition in the industry and the growing need for lenders to adhere to stringent compliance requirements. The demand for higher operational efficiency and improved customer service is causing lenders to replace their antiquated business processes and complex legacy systems with innovative technological solutions like automation. In fact, automation today is an integral part of industry-leading lenders who are leveraging it to remain competitive and ensure long-term survival.
| In a survey of lenders, the overwhelming majority (99%) said that technology can improve the mortgage application process and deliver benefits like the simplification of the entire process (74%), reduced time to close (70%), and minimized data entry (67%). |
Lending Use Cases to Illustrate the Role of Automation
Mortgage Data Handling
Traditional ways of data management in mortgage have always been resource-intensive and involved tasks like manual data gathering, information verification, and managing varied information from third parties. Lenders usually invest in dedicated teams for verification of employment, credit reports, tax returns, appraisals, and asset details of loan applicants. Furthermore, for any unfurnished details or clarification of information pertaining to these documents, employees must follow up with the loan applicant to determine their loan eligibility. Additionally, to manage payment and reconciliation, lenders manually pay vendor invoices and employees are forced to manually reconcile accounts.
These time-consuming processes force lenders to aggressively seek alternatives such as lending automation solutions. Today, smart lending solutions such as MSuite are being increasingly considered to streamline the lending process for higher efficiency. These solutions have been designed from the ground up to manage mortgage loan documents without any human intervention. The automation solution receives, reads, and enters relevant information from third-party reports and other sources into the designated software system. These can also automate payment and reconciliation processes and perform compliance functions with minimal supervision.
| A recently conducted survey claims that the importance of mortgage lenders with digital solutions such as online applications increased for borrowers in 2020. 58% of borrowers said the option of an online application affects their lender decision. |
Reporting Automation
Reporting is a growing cause of concern for lenders. With most small and mid-sized lenders operating without a reporting standard or consistent communication format between servicers, current reporting frameworks allow opportunities for both misrepresentation and inaccuracies. Employees are forced to spend most of their productive hours fiddling with those complex spreadsheets that give them a hard time in collating, formatting, and converting data into cognizable reports. However, despite such blockers, mortgage reports are a critical indicator for lenders to determine indicators like the creditworthiness of borrowers, business outlook, current performance, future risks and opportunities, and others.
| Lower loan origination costs, stronger compliance, and reduced risks: 76% of lenders participating in a survey said they think digitization delivers these and related operational benefits. |
Recent developments in mortgage reporting automation solutions have turned the tide in favor of lenders. AI-based mortgage solutions like the MSuite provide accurate reports and trend analysis of all automated tasks within the mortgage organization. It generates standard, interactive reports with critical parameters to address specific business needs. Such automated tools can create reports on almost all relevant mortgage data points being stored in the system. Automated mortgage reports are generated by integrating data from the organization’s mortgage accounting system. These reports include best-practice metrics and details specific to regions, branches, corporate P&Ls, and balance sheets.
Assistance to Call Center Operators
The quality of customer service in the mortgage industry determines the success of lenders to a great extent. However, customer agents often struggle to address the issues of callers owing to disparate and siloed information management systems. Also, a typical mortgage call center is expected to drive a massive amount of sales volume and is usually filled with entry-level customer executives whose job is to collect an application fee and run your credit. This undermines the quality of service the customer gets and leads to long turnaround times, ineffective issue resolutions, and higher service costs, among others.
| A research study predicts that by 2023, chatbots in banking and lending will touch $7.3 billion in cost savings globally. |
To tackle such human-specific shortcomings, lenders are reaching out for mortgage customer service automation tools such as consumer-facing chatbots. Such interactive digital systems are set up with the intent to provide 24/7 support and service and to capture leads and engage customers better. Automated mortgage service tools are used for sending emails, exchanging information between systems, and opening and closing applications. These allow mortgage call center agents to easily push and pull borrower data from their systems, saving agents time, facilitating superior customer service, and reducing costs by helping agents to serve more customers.
| 31% of participants in a mortgage survey said that by 2023, leading institutions would be able to authorize and share information regarding employment, banking, tax, and credit histories of borrowers seamlessly across integrated networks. |
Digitization of the mortgage ecosystem is inevitable as the demand for it is always on the rise. The Covid-19 pandemic has further expedited the efforts of lenders to introduce automation of operations for continued growth. As digitization proves to be a game-changer for lenders that are struggling to manage repeatable processes with low complexity, swivel chair tasks, and rule-based workflows, automation is the only way forward to realize the best ROI and sustained growth.
Who We Are and Why We Are An Industry Authority?
The Expert Mortgage Assistance (EMA) team has been serving mortgage clients across the US for over ten years now with its custom digital solutions. As a leading mortgage backend service provider, our cutting-edge innovations like the MSuite are tailored to the unique business challenges of lenders. Besides extending the best possible digital experience to borrowers, our solutions and service models have been designed to meet three crucial objectives for the client – improved turnaround and accuracy, reduced operational costs, and highly scalable operations.
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