Fix Your Mortgage Processes by Becoming Truly Digital

All industries in the United States are rapidly needing to digitize and people are scrambling to adapt.

Unlike before, healthcare claims can be settled within a click of a button. Don’t feel like cooking at home? Order food on DoorDash or Uber Eats. Forgot to carry your wallet? As they say, ‘Venmo it’. Mobile phones have evolved into smartphones. You can control your household appliances through your phone—switch on lights, control the AC temperature and do so much more. Car dashboards have become very advanced—get tips to avoid traffic, calculate mileage and fuel consumption. There are endless examples from our day-to-day life.

In the race to keep up with, businesses are producing digital ‘haves’ and ‘have-mores’ and the mortgage industry isn’t far behind.

The key to staying ahead? Control mortgage processing costs and deliver an unparalleled customer experience. For this reason, many businesses are choosing to offer a digital-first experience which is a smart move. As a lender, you must consider digitizing the process end-to-end i.e. include both customer-facing and back-office processes to deliver maximum quality, efficiency and customer interaction.

Digital Mortgage Process: Leveraging the Golden Trifecta

If you want to generate value for your businesses and customers—drive efficiency, differentiation and reduce costs—you need a truly digital mortgage process empowered by innovative capabilities across the functions. Data, technology and people (the golden trifecta) are key to this.

Here’s how you can achieve a digital lending process, innovate front-end and back-office operations and improve your bottom line:

Think Smart and Start Small—identify tasks that require automation

Iterative and manual mortgage processes add significantly to the cost of loan originations. As a lender, you must evaluate the loan lifecycle and identify tasks to automate—it will help increase efficiency and reduce costs.

Use robotic process automation (RPA) and start imitating routine tasks that don’t require mandatory human intervention. RPA is quick to implement and incurs minimal expenditure; you can use it for loan processing tasks like applicant information verification and compliance management and even to generate reports.

Fannie Mae and Freddie Mac regulate majority mortgage loans in the US. These regulatory bodies advise automating loan processing using RPA. Doing this can help lift the daily administrative burden on employees and allow them to focus on complex issues identified from automated loan reviews. RPA also facilitates greater transparency and control over the entire process as the technology is easily trackable.

For those wondering, here’s how you can achieve a digital loan process using RPA. Automate functions performed using standard checklists or guidelines—pre and post-closing audits and underwriting are a few of them. Using RPA for these tasks will speed up the review process, minimize chances of errors and allow employees to identify and work on high-risk loans.

Go Beyond Conventional Solutions—Do More with Technology

So, what comes after you make your processes smart by using RPA? Make them even smarter. You can use technologies like artificial intelligence (AI) and machine or deep learning (ML) to not only automate tasks, but also drive actionable insights. Make informed decisions that are driven by data, experience and customer interactions during the loan lifecycle—improve processes and reduce costs.

According to a recent poll by Fannie Mae, a significant number of mortgage lending firms plan to roll out AI in the next couple years. As a lender, you can leverage digital loan processing systems to examine data originating across different functions and mitigate future risks, loan contingencies and changes. Using the right tools, you can assess borrower spending patterns, predict payment defaults, assess credit risks and provide sanctions accordingly.

Banks are already digitizing; however, opportunities remain.

The mortgage industry is not only highly regulated, but also closely scrutinized. Technologies like ML can improve the process of underwriting through automated reviews. It can also unburden in-house teams by enabling them to make decisions based on credit policy guidelines and applicant data.

For instance, ML can study applicant patterns to determine their willingness to proceed with an application (are they potential future customers or mere window-shoppers?). This will help loan officers focus on committed applicants and improve the bottom line in due course.

However, what about more complex processes fragmented across multiple touch points, you ask? Well, don’t let this hold you back. The opportunities are diverse with AI and ML—you can leverage solutions like chatbots and optical character recognition (OCR).

For instance, Barclays US is using ML to assess and study applicant grievances and uncover the most common reasons for complaints. This could help them identify processes that most require streamlining and determine if there’s a scope to automate them—their staff can focus on building stronger and more meaningful relationships with their customers.

Employee Experience is Equally Important—don’t ignore it

Mortgage businesses face the biggest challenges in terms of cost and productivity. Employees mirror the experiences they have while working in your organization. So, how about using technology not only for a digital mortgage process, but also to reduce the administrative burden on your employees. For instance, chatbots are evolving into essential co-workers in the digital age.

According to a study by Juniper Research, chatbots in banking will help save $7.3 billion. Most lending institutions use chatbots in their customer service process to reduce the dependency on human agents. Capital One uses Alexa to help customers review their balance, transactions and pay mortgage installments in the click of a button.

Furthermore, virtual chat assistants are available 24/7 and offer consistent resolutions and advice.

As a lender, you can use chatbots to help employees stay up to date with evolving policies, speed up document review and study complex products to provide the right support and information to customers.

Reorganize Your Workforce to Complement Automation

Technology will work for you only once you can identify the areas in which your human workforce will best add value to processes and for customers. According to the Mortgage Bankers Association, workforce expenses for financial and lending institutions in the second quarter of 2019 accounted for more than 67 percent. Industry leaders find technology incorporation a good way to bring down these costs.

However, people play an equally important role as far as bringing down staffing costs are concerned. Here’s what your strategy must include:

  • Focus on recruiting a more agile and futuristic workforce; help them upskill and accelerate their journey
  • Recruit people who value the use of technology and are comfortable with its use—this will also mean repositioning the roles impacted by the digital shift
  • Create a human-first workforce that prioritizes service delivery and customer experience
  • Map business success using AI and similar technologies. Train your staff to view AI as an enabler instead of competition threatening their job security.

Hopefully, these tips will help you take the first step towards becoming truly digital.

At HelioNext, we help our customers create a successful mortgage processing ecosystem by making the best use of automation. We help you achieve processing quality, efficiency and reduce costs. Our comprehensive, technology-led solutions have been helping businesses deliver the true digital mortgage experience for over 15 years.

Make the shift, get in touch with us!