It’s no secret that the mortgage industry is changing, so much so that in the next decade mortgage technology will change dramatically automating 80% of the processes. Advances in technology have made it possible for borrowers to secure a mortgage online, without ever having to visit a physical bank branch, and the last two COVID years testified to the robustness of digital structure in our industry. This is just the beginning, in the years to come, we can and should expect even more technological advances in the mortgage industry – changes that will make the process of securing a mortgage faster, easier and more affordable than ever before.
The key now is for companies to simplify their understanding of the technology landscape and navigate through the changes to come. There are several ways for lenders to get the most from their partners and technology providers. Lenders and servicers need to make sure their technology review process includes all the players, internal and extern to ensure success.
On a high level, there are basic technology requirements a company needs to maintain or even stay ahead of the curve especially in the lending industry:
- Advances in artificial intelligence (AI) and machine learning – For example, neural networks now have capability to take AI at par with human ability.
- Digital mortgages – Blockchain technology is already promising a bright future to most of the tech-savvy population.
- API libraries – It’s not OCR anymore but API’s that will fuel automation.
Now that we know what is needed; the next question is “how” or rather “how can we do it the smart way,” by not throwing everything that we have built over years in a dark corner but leveraging and building on the good work. Every legacy has some positives and some obsolete elements. Here are some steps to take to start the process:
- Talk to your technology experts and advisors (internal and external) about the current infrastructure and solicit feedback on what is working and what might need to be changed.
- Are the reviews all negative or are there some sparks of appreciation for the beauty of the existing tools? Depending on the response, you can either get recommendations for new fancy software and start fresh or consider how to effectively use the tools that are in place.
- The second step would be to challenge your tech teams to review at all the different systems you already use and determine how they can work together and create process efficiencies. Integrating disparate systems is a complex task but no matter how daunting it may be, this can create immediate efficiency. It also eliminates the significant cultural change that an organization goes through with a new process design or system.
- Develop special incentives for employees outside of the tech team to identify and address repetitive and mundane activities done by the staff. The submissions should be routed to the tech team for validation and conversion into business logic that can be used to create AI.
- Differentiate initiatives that need an external environment for adoption such as blockchain. For example, next generation features such as digital mortgage are not necessarily in blockchain today. There is however every effort to reduce customer touchpoints which will evolve your offerings to a digital product. It’s a journey, and we must stay updated for next generation offerings.
- Carefully evaluate all the customer touchpoints and get the best-of-the-best design and UI/UX available for these areas. This is where some obsolete legacy systems are found, and they may need to be replaced. The marketing team needs to be actively involved in these areas, because it all comes down to customer experience. Anything or any process that is customer-facing or that is going to be pleasing to the eyes or to touch and feel, should evolve. This includes websites, customer interaction applications or chat windows, and IVR. A better workflow design or an AI/ML engine investment is worth the positive return.
When an organization does decide to invest in new technology or services, many times it works, but sometimes it becomes a never-ending project. The problem with this approach is that you are not learning anything about the technology, or how to use it to fit your needs – you are just continuing to invest time that could be better spent in your core business. So, I suggest looking internally for quick technology wins and instead of trying something completely different, leverage the existing capabilities by making them more efficient.
Being efficient and lean will not only help you manage your business better, but it also gives a competitive advantage and is reflected in customer loyalty. Most customers do not know how a company manages expenses or resources to deliver a service, nor do they care. They do see the results in the quality of the service; they just want a good customer experience. A customer will recommend and promote companies that offer a great experience and product without overpricing.
Before you break the bank to integrate the latest and greatest new technology, consider how you can use your existing technology stack more effectively. You may be pleasantly surprised. But if you do need to make some changes, fully commit to making them in a timely fashion and get input from users.
Vijay Pandey is the Associate Vice President at Wipro Digital Operations and Platforms, a sister company of Wipro Opus Risk Solutions. Pandey has more than 15 years of experience in lending practice. He leads mortgage delivery operations for Wipro and has been instrumental in developing operations and delivery niche service along with customer satisfaction.