On September 28, we travelled to San Francisco to join more than 1,250 technology and strategy executives, investors, product managers, entrepreneurs and other mortgage industry players to see first hand what the future holds for this $14 trillion industry. Here are some of the key takeaways from Digital Mortgage 17, along with some predictions for how the digitization of lending will manifest itself through 2018 and beyond.
Robotics Process Automation & Machine Learning
Despite lagging behind other industries when it comes to innovation in the past, the mortgage space is now ripe for transformation, and Robotics Process Automation (RPA) and Machine Learning are leading the charge. To highlight some of the major ways RPA and Machine Learning look set revolutionize the mortgage industry, we’ve borrowed five key points from Navin Gupta’s excellent article on the topic, which you can find via a link at the bottom of this blog post.
Probability and risk analysis - Predicting the probability of customer retention and the risk of default by borrowers. This information can then be effectively used by mortgage companies to take proactive steps in preventing such scenarios from happening.
Identifying sales opportunities - Monitoring, or ‘listening in’ on sales and customer service calls to identify business opportunities that may have otherwise been missed by sales teams. Entire conversations can be transcribed, missed opportunities highlighted, and information shared with senior managers.
Application reviews - Reviewing loan applications for completeness, ensuring that the information entered is consistent and correct. Using machines during the loan application process will not only minimize the processing time and reduce errors, but will also improve customer satisfaction.
Monitoring previously turned-down applicants - It is very difficult to monitor changes in the situations of thousands of previously turned-down applicants using manual processes. However, machines can easily do this and at a regular frequency, so if one factor improves - credit score for example - lenders can re-approach the applicant in a timely manner with a new offer.
Combating lending bias - There have been numerous studies in recent years that point to race and gender bias in mortgage lending. For example, one study by Woodstock Institute found that female-headed joint applications are much less likely to be originated than male-headed joint applications. Given machines are able to make recommendations based on a set of objective criteria, biases will be put aside, which will result in new revenue streams for mortgage companies.
Automation, automation, automation…
Traditional mortgage lending processes are built on complex legacy systems, big spreadsheets, and mountains of paperwork, which all rely heavily on manual processes. Within these environments, the dependance on human labor leads to significant amounts of time being spent on relatively low-skilled tasks, when it could be being spent on more pressing matters, like dealing with customers.
No surprise then, that more and more mortgage companies are saying goodbye to manual processes, and hello to automated solutions. Automation leads to more efficient mortgage processing by alleviating three major burdens: Manual data entry; Lengthy processing times, and; High operation costs. Given these benefits, expect to see more lenders looking to automated solutions through 2018 and beyond.
Today’s consumers are always on the move, but constantly connected to the web via their smartphone - and when they're not on the move, they’re connected at home or work via a laptop or tablet. Mortgage companies are recognizing this, and in an effort to speed up the lending process, while simultaneously cutting admin costs are allowing applicants to manage their loan applications via web-based borrower portals. Using these portals, borrowers can easily and securely upload and download documents, monitor the status of their loan application, and exchange messages with their lender. Consequently, lenders can save time, cut staffing costs, and provide a significantly better experience for their customers.
This is an exciting time to be part of the mortgage industry, but while technology makes innovation possible, lenders should not undervalue the role humans play in the lending process, particularly when it comes to delivering good customer service. According to a survey targeting millennials, 22% of them would still like to talk with a person and 23% want a faster experience - both of these things can not be achieved with technology or humans alone - in order to succeed, lenders need to find the right balance between the two.
Looking to get ahead of the competition in 2018? Speak to us today about how XDOC can help. Designed for the rigors of lending, XDOC is a powerful cloud-based electronic document management (EDM) platform that helps lenders capture, manage, classify, and deliver loan documents. XDOC eases the complexities of today’s lending landscape. Find out more at https://www.scryptinc.com/xdoc/.
You can check out Navin Gupta’s LinkedIn post here.