Using Automation To Transform Lending Operations

The landscape of the lending industry is ever-changing at an exponential rate. Although it may seem paradoxical, businesses must be willing to change to similar degree – increasingly fast at an increasing rate – if they have any hopes of keeping up with the times and staying relevant in the mortgage industry.

It’s no secret – a higher influx of technology and innovation is required for businesses to thrive. Lending organizations are highly competitive and regulated, and therefore should focus on technologies that have a positive impact on the entire organization. The most common strategic approach adopted within the industry has been an alignment of automation-based technologies and back-office operations. Despite the existence of this trend in mortgage innovation, the industry moves slowly and there continues to be late adopters & doubters. However, the COVID-19 pandemic has forced an acceleration of digital transformation and automation adoption for lending organizations looking to transform and scale their businesses at every level.

For a regulated industry like lending that relies on compliance, the most important aspects are speed and accuracy. Robotic Process Automation (RPA), a popular use of automation technology, can directly impact back-office operations by improving speed and accuracy. Lending organizations that enable RPA for operational purposes can automate internal and external compliance frameworks at breakneck speed and near perfect accuracy. Additionally, organizations are able to realize a significant savings both in time and resources, allowing employees to do more meaningful work, more efficiently, while providing a more engaging customer experience.

For example, look at the current COVID situation and answer the following questions:

  • Is it prudent to have workers putting in 10-hours-a-day working from home filling out sheets and forms where there is room for error?
  • Can organizations have employees filling out these manual, time consuming tasks at home when/where there are distractions?
  • Is there room for error at home?
  • Should organizations risk bringing in workers to an office where the opportunity to spread COVID is much greater?

If you answered no to these questions – it points to a solution that could take advantage of RPA and further automation.

To bridge this last point, RPA in the lending industry is important because there are a lot of back-office tasks, particularly in the underwriting process. The underwriting process is the most pivotal in lending, and RPA can help agencies handle the end-to-end processing of loans while making underwriting decisions in each step of the lending process. This can include vital steps such as loan origination, screening, validation, loan management, and basically every stage of Loan Origination Cycle.

Since the lending industry is highly regulated and there are hundreds to thousands of applications each day, the faster and more accurately you can process these steps, the better your business can grow and flourish. Automating tasks, processes, forms and other business-related activities that are regulated by the FDIC, TILA and RESPA at near 100% accuracy with faster processing speeds, eases the burden on overworked staff and management. Additionally, an RPA solution does not change any existing IT infrastructure, making adoption seamless over time. Done correctly, an RPA solution seamlessly “sits on top” of a company’s existing IT infrastructure, making adoption frictionless; both initially and over time.

Lending organizations should be aware that RPA has many practical applications within the user experience/customer experience (UX/CX) side of lending as well. Since we can all agree that buying a home may be one of, if not the biggest decision in a person’s life, lending organizations should be cognizant of how they can use RPA to improve CX. This will allow for lenders to complete new business, gain referrals, garner potential repeat business, and most importantly, enables them to take market share from competitors. Having a transformative CX helps to shape the lending experience truly digitally for customers.

Customers naturally gravitate and develop brand loyalty towards lending institutions – or any brand for that matter – that provide the most enjoyable customer experience. This can be the one that is most tailored to their customer, or repeat customers, and provides the fastest way to make a quick and painless buying decision. Today’s borrowers have come to expect a lot from their lenders: they want instant responses to inquiries, expect online portals to access and process their requests anytime and anywhere if they have questions, and many will look for a Chatbot before calling or going in person to an actual branch. Using RPA should be the answer here as these solutions can run with speedy and accurate responses that can promptly serve customers at all times. After all – Amazon has taught us that as customers we should be able to get what we want – when we want it – with very minimal interaction.

While the use of RPA has great benefits on the operations side, RPA’s strengths in speed, accuracy and 24/7/365 runtime also make it a robust technology to truly shape and transform an enterprise completely from back-office operations to customer facing UX. Businesses in highly regulated domains, like lending, have an abundance of use cases for RPA and automation due to RPA’s strengths in speed and accuracy.

Organizations, not just in lending, that fully adopt RPA to help them digitally transform their enterprise will undoubtedly have an advantage in today’s market to help them gain majority market share with use of automation technology at their disposal. That’s what I call using technology to truly change the business landscape.