While the mortgage industry has historically been slow to adopt technology, it is poised to see significant changes in 2019. In a survey by National Mortgage News, about 83% of top producers said digital mortgage technology is the key to their company’s future growth. It’s clear that lenders are looking to invest in digital solutions to create new market opportunities, and power better business and customer outcomes. While this is a welcome trend, it’s important to consider technological investments in a rational and thoughtful manner – in a way that makes sense to your organization and your customers. So what should you be looking at in mortgage technology for 2019?
As tech-conscious millennials enter the mortgage market and demand Amazon-like speedy and intuitive experiences, here are two technologies to keep your eye on:
Robotic Process Automation (RPA)
Mortgage lenders operate in an environment fraught with operational and regulatory changes. Continued reliance on legacy systems, disparate databases, and manual processes increases cycle time as well as costs. Automating high volume, repetitive, and routine tasks gives employees more time to focus on high value, strategic activities that enhance customer experience and grow the business. Similarly, automating manual oversight and review processes reduces operational risks through higher accuracy and consistency, resulting in tighter risk monitoring, reporting and compliance.
RPA improves operational efficiencies throughout the business through a combination of automation object recognition, optical character recognition (OCR), and direct application integration. Applications of RPA in mortgage industry include: data entry and transfer, workflow management, data compilation, verification and reconciliation, and routine transaction processing. Leveraging RPA for rules-based tasks gives speed and agility to the organization, transforming sluggish processes and creating significant opportunities to drive value.
Artificial Intelligence (AI) and machine learning (ML)
If you already use RPA in some of your processes, AI and ML can help you go beyond simply automating tasks. These emerging technologies are critical to achieving larger goals such as enhancing operational efficiencies and customer experience in order to stay competitive. Self-learning ML algorithms, for instance, can validate much of the documentation involved in the lending process, and identify issues and raise alerts for rapid resolution. The result: shorter cycle times, higher volumes, and greater accuracy. ML algorithms are also useful in analyzing internal data to root out fraud, personalize customer interactions, and create cross selling/up-selling opportunities.
While AI adoption in the industry is still in a budding stage, there is significant interest in the technology. Sixty-three percent of lenders are familiar with AI and ML technologies while 27% have already tested or utilized AI and ML-based tools within their company.
As lenders prepare for 2019, those that are able to quickly understand the potential of next-generation technologies and implement them to understand borrower needs and optimize experiences will be the winners. While forward looking lenders have already begun digitizing their processes, there are several roadblocks to the adoption of new technologies. Chief among them are integration complexity, high costs, and lack of technical skills. With continued technology advancements, the industry will also need to understand how to integrate their human resources with the opportunities created by AI and ML. One way to avoid pitfalls and fast track implementation and benefits is to partner with an experienced BPO services provider.