Digital transformation in the mortgage industry – 4 steps to getting it right

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Evolving customer expectations are a modern day reality for mortgage companies. Customers reported significant declines in satisfaction in 20171 due to their mortgage servicer’s focus on profitability rather than customer experience. With a greater number of millennials (who demand transparent digital engagement) entering the mortgage market, the need to transform has become imperative. But in the absence of a digital transformation playbook, how can mortgage companies get it right?

Successful mortgage digitization requires a holistic approach

To be successful, digital transformation must go beyond short-term approaches such as upgrading legacy infrastructures or deploying re-platforming initiatives, and align with long-term business objectives. It must be underpinned by a full-on digital strategy that combines cost effective delivery models with domain expertise, process optimization, innovative technology, and intelligent analytics. Digital transformation in mortgage can be visualized as a four-step journey:

#1 Optimize processes through process engineering

According to the J.D. Power 2017 U.S. Primary Mortgage Origination Satisfaction Study, overall customer satisfaction rates declined due to longer time lags between initial application and final closing. Reengineering processes using workflow technologies, deploying specialized applications and ensuring mature process documentation can enhance efficiency and quality, ultimately leading to much improved customer experiences.

#2 Reduce costs using global operations centers

Controlling skyrocketing fulfillment costs while mitigating risk, maintaining loan quality and providing responsive customer service is a major challenge confronting mortgage companies. Global operations centers offer a “right-shore” delivery approach, enabling lenders to take advantage of the right mix of locations and labor. The ability to tap into skilled industry staffing and round the clock operations leads to several desired outcome, like cost reductions and streamlined processes.

#3 Drive standardization and efficiency through digitization

The mortgage industry operates in a highly dynamic regulatory environment. Continued reliance on complex legacy systems, multiple databases and manual processes not only creates inefficiencies but also takes employee focus away from process improvement and customer experience. Partial or full workflow automation of simple, repetitive tasks using technologies such as RPA, OCR, ICR and AI, offers significant opportunity to drive value and efficiency.

#4 Create competitive advantage using advanced analytics

Data analytics opens new doors for competitive differentiation. Actionable insights from customer interactions derived through speech, text and customer sentiment analysis ensure a better understanding of customer needs and preferences. This lets lenders offer tailored customer experiences. Then there is end-to-end customer journey mapping that helps identify process gaps to holistically improve customer experience as well as operational performance. Analytics also play a crucial role in driving automated compliance monitoring and exceptional associate performance.

Embracing digital mortgage is a business win

The four-step journey shows digitization is not as simple as checking a box or deploying a one-time solution. It is a rigorous practice designed to overhaul the home-buying experience that requires business alignment, organizational buy-in and change management to ensure success. The important thing to remember is the benefits – for both consumers and lenders – far outweigh the pain involved in moving from a traditional mortgage model to a digitized one. From personalizing customer experience and jump-starting innovation to enhancing compliance and lowering costs, digitized mortgage operations help lenders stay relevant and competitive.

1 CNBC, Mortgage Industry Under Fire Again … From Younger Buyers

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