Since early 2000, many industries have reaped benefits from the digital disruption. But, high risk exposure, enormous regulatory scrutiny, and volatile market conditions have left the mortgage sector way behind. Of late, several prevailing trends have influenced the mortgage industry to veer away from the good old-way of doing things to embrace digital mortgage. Consumer is the most powerful catalyst of this change.
Mortgage lending and servicing process flow is heavily document centric with stringent regulatory compliance requirements. Typically, loan files exceeding 500 pages, have a processing time of around 50 days from start to finish. So, to improve this loan processing efficiency and keep pace with the rapid digital adoption by their clients, mortgage executives are investing time to understand, evaluate, and embrace digital solutions. Specifically, they’re seeking to modernize their existing legacy platform and application eco system, to a digital mortgage business (DMB) platform. This digital mortgage platform, therefore, must serve the entire mortgage lending lifecycle from origination, processing, underwriting, to QC, post-closing, delivery, and servicing.
Key objectives of digital mortgage initiative
- Provide delightful personalized experiences to borrowers across digital channels
- Digitization of mortgage process flow with increased transparency to borrowers, lenders, investors, and regulators
- Faster processing with reduced operational costs
- Back-office automation
- Analytics and insights
These objectives have mandated significant investments in digital content and experience management (DCxM) in the last five years than the earlier decade. Incremental value addition or competitive advantage through disruption of the entire lending and servicing process are the underlying benefits. Mortgage enterprises are heavily investing to implement the following as part of their digital mortgage initiative.
ECM components and solutions
- Digital Experience Management (DXM)
DXM provides delightful and personalized digital experiences to borrowers across digital channels (web, mobile, etc,). Or it could also be an internal integrated digital portal for loan officers, processors, underwriters, and loan servicing teams, throughout the mortgage process life-cycle.
- Automation of back-office processing with OCR / ICR, RPA, and AI
Many lenders handle document processing and indexing manually with a huge workforce. Back-office processing is, therefore, time consuming, error-prone, and effort intensive. This is a significant opportunity for automation using OCR, ICR, and NLP technologies. Another opportunity is enabling self-servicing capabilities through a borrower facing portal leveraging AI-powered chat-bots or personal assistants.
- Document Management System (DMS)
DMS is a key component of a digital mortgage platform. It effectively manages (captures, stores, retrieves, and archives) all mortgage documents in a single centralized repository. Customers/users can access these documents anytime, anywhere through a digital mortgage portal or mobile app.
- Business Process Management and Case Management
BPM automates the entire lending process flow (manual to automated, paper to digital). Every borrower application or issue is tracked as a case until it is resolved or closed. Therefore, the whole process becomes transparent to the borrower.
Adoption of e-signature technologies simplify and streamline signature requests (for example, execute form 1003 and disclosure agreements) in the mortgage application process flow.
Core mortgage origination and servicing platforms, and applications can be integrated with external lending eco-system (for example, credit rating agencies, US Post Office, lending agencies, large banks, and IRS) using the micro services architecture framework.
- Analytics and Insights
Mortgage CXOs, investors, lenders, and marketing teams can generate analytics based on customer portfolio and behavior on digital channels. Meaningful insights gleaned from such analytics can help to refine business strategy, better serve the borrower, and for business growth.
Enterprises will continue to invest in these digital initiatives through 2018 to redefine consumer experiences and reduce compliance and security risks.
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