Residential Mortgage lending has been a very volatile business. There are times when lenders need to deal with extremely high volumes. This puts immense pressure on existing teams. Besides, the mortgage industry also works in a paper-intensive environment. On average, there are often more than 25 types of documents for retail mortgage loan origination process, over 15 in correspondent lending, and over 10 in mortgage servicing rights. Handling the burden of documents in huge volumes and that too manually is a cumbersome process and is prone to errors.
To add to this, many lenders are faced with challenges of archaic systems for Image Processing and Data Extraction which can severely hamper the processes affecting scalability. Such manual practices lack consistency, auditability, and accuracy, and are above all, time-consuming.
Now, with increasing customer expectations, stricter regulatory requirements, and operational challenges, it is time that lenders revitalize their mortgage operations and increase efficiency, decision speed, and productivity to enhance customer experience.
Lenders need to equip themselves with the right kind of technology to improve their practices while exploring more automation options. It is now imperative to deploy the right kind of technology to smoothen out and revamp the mortgage process to a great extent. With the help of robust technologies and enterprise automation, lenders can ensure that even in times of crisis, there is no disruption in service to clients.
AI, ML-powered solutions to the rescue
By embracing automation solutions like Artificial Intelligence (AI), Machine Learning (ML), Robotic Process Automation (RPA), Chatbots, etc, lenders can offer significantly improved customer experience with a minimized risk of losing customers and reputation. In Fintech, the use of AI is expected to grow over $22.6 billion in just five years. The Fintech market expects a CAGR of 23.37% until 2025, and there are lots of factors that even fastening the growth.
Moreover, since AI and ML can be leveraged throughout every stage of lending, from origination, acquisition to servicing decisions, it helps lenders immensely in several ways. Communication between buyers and sellers will receive an immense boost with AI and technology can become a useful tool to provide fast responses to clients, without spending resources on more staff.
AI-powered RPA can also help lenders solve specific processing problems and increase their productivity by as much as 20%. Such technologies are highly effective in helping improve loan processing time, quality, compliance, and cost challenges. Given the intense, demanding, and complex needs of customers, RPA can be beneficial to lenders.
ML too offers seminal advantages in helping lenders become more efficient, profitable, and capable of delivering enhanced customer experience throughout the mortgage phase. It helps in classifying documents and assessing data accuracy, so lenders can process loans faster.
Most importantly, with the help of technology and automation, lenders are able to avoid the dependency on the human element, better match the customer experience, and streamline the daily tasks of employees.
Tech: A solution to time-consuming tasks
In fact, technology can play a major role even for simple tasks like customer queries which could be directed to sophisticated AI-powered customer service bots, allowing customers to help themselves. Through the adoption of technology, lenders can offer an advantage to customers in the form of greater choice, efficiency, and possibly lower cost. Technology can be leveraged in various areas like end-to-end digital origination and servicing, default prediction, optical character recognition (OCR), and self-service tools such as smart chatbots to perform customer requests.
Besides using technology for basic data analysis and to appraise the loan applicant, lenders can also use advanced versions to find hidden financial relationships of borrowers, crunch large volumes of data, and most importantly, predict the behavior of the loan applicant. Fast, automated, high-tech solutions can help replace repetitive, low-value tasks with touchless processes that deliver better results at superhuman speed.
Associating with the right partners for advanced tech solutions
Some lenders may consider new technology as an upfront investment and tend to hold back. One solution could be to network with the right partners to develop effective strategies for business continuity. Lenders can turn to niche players who can help with the right kind of technology to improve operational efficiencies, save time and reduce costs.
How Visionet can help
Visionet is one such company that is known for offering domain expertise for agile, nimble, quick operations powered by technology to clients. In a sector like a mortgage where time is of the essence, Visionet offers quick onboarding procedures and immediate start of operations. With cost-effective technology-based solutions that provide maximum savings, Visionet helps faster loan processing along with multi-layered quality checks and audits to ensure quality results. The company works extensively with clients to create and implement uniform procedures across their departments for improvement in TAT.
Visionet is a leading digital technology solutions provider for the BFSI and Residential Mortgage industry. We are passionate to deliver exceptional business outcomes to our clients leveraging deep industry expertise and proprietary mortgage technology products. We post our views on mortgage technology and industry updates through this blog.