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1 HOW DIGITAL SOLUTIONS ARE TRANSFORMING THE MORTGAGE CUSTOMER EXPERIENCE

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Page 1: HOW DIGITAL SOLUTIONS ARE TRANSFORMING THE MORTGAGE ... · transformation for companies across a range of industries, and leverages expertise in design thinking and data analytics

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HOW DIGITAL SOLUTIONSARE TRANSFORMINGTHE MORTGAGECUSTOMER EXPERIENCE

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The mortgage loan process continues to be an expensive, time-consuming endeavor for mortgage companies, which are facing not only the challenges of meeting escalating regulatory requirements, but also heightened consumer expectations for a quick, painless process. The cost of originating a loan climbed to more than $8,0001 in the first quarter of 2017, driven largely by compliance with regulations put in place over the last decade. Those regulatory costs are likely to grow over the next year as lenders incorporate the new Home Mortgage Disclosures Act (HMDA) rules, which require changes to policies and procedures, integration with current software solutions or the purchase of new solutions, and training for staff.2

Those climbing compliance costs coincide with a growing expectation among consumers for a mortgage loan process that delivers the ease and convenience provided by other companies they transact with. A PwC study on consumer lending found that, “Other than economic factors or having an existing relationship, borrowers believe the most important factor in choosing a lender is the speed of the process.”3

The only way mortgage companies can meet this need for speed while still being compliant is to deploy technology solutions that enable their human employees to be as efficient as possible. And to provide real value, this technology has to go beyond simple software applications to perform complex tasks in a way that reproduces human decision making: it requires applying artificial intelligence to the mortgage process.

Sutherland, which provides process transformation for companies across a range of industries, and leverages expertise in design thinking and data analytics to streamline mortgage lending. Its solutions deliver the right balance of automation and human input to reduce the amount of time and money spent on every loan. Using digital solutions from Sutherland, lenders can create

Robotic process automation: improving speed and accuracy of the mortgage process.

a satisfying mortgage experience for homebuyers with an agility that helps their bottom line.

Three game-changing digital capabilities Sutherland provides a connection point between artificial intelligence and human effort with three key solutions that can be deployed separately or work in tandem to generate a smarter loan process: robotic process automation (RPA), data analytics, and customer journey mapping.

RPA interfaces with existing systems to perform complex rules-based tasks. This technology mirrors the way humans navigate the user interface, controlling applications through the existing commands of whatever legacy systems are in place.4 RPA’s design makes it a good fit for some of the repetitive, check-list driven work in mortgage lending, while injecting quality control and assurance in the process.

Using RPA, mortgage companies can:

— Connect with borrowers where it’s most important Giving repetitive tasks to robots frees up human staff to connect with borrowers at critical touchpoints. Why tie up human staff in manual processes when robots can do it faster with fewer errors? RPA enables detail-oriented service where it really counts.

A PwC report on consumer lending published in 2015 showed a clear preference for human contact at different points in the loan process. “While it’s true that home borrowers prefer a more digital process today than they did two years ago, much of the data shows that digital and traditional channels have to be equally adept at servicing mortgage borrowers. In other words, many consumers want to research and apply for a home loan online, but when it comes time to the closing stage, consumers want to be able to talk with someone knowledgeable to address their concerns, if needed.”5

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— Easily scale up or down to meet changing workload needsRPA means work can be done all day every day, working in the background of mortgage companies to increase efficiency. And since every robot can do the work of between three and 20 people4, scaling becomes much easier than hiring, training and potentially laying off regular staff as businesses go through peaks and valleys. Sutherland conducted a time-in-motion study with a leading mortgage company and expedited processes by 20 percent. In a post-close quality control (QC) checklist, the mortgage company had a QC checklist that exceeded 300 items. Sutherland reviewed the checklist and identified about 60 items, or 20 percent, of tasks to be performed by a robot instead of a human. In the traditional post-close QC process, humans were required to complete all 300 tasks. By reducing the total tasks by 20 percent, humans could focus more of their time on meaningful work. And when tasks came to the robots that were more complex than they could handle, humans took on those tasks.

— Improve complianceBy its very nature, RPA provides detailed audit trails and more transparency. But even more important, the number of errors made in formerly manual functions can be astoundingly small. For example, a robot working at a pharmacy at the University of California, San Francisco, filled 350,000 doses of medication without making a single error.6 Imagine the difference RPA accuracy could make at mortgage companies, which would be able to limit overlapping checks to uncover errors.

Data analytics has evolved alongside the technology it relies on, growing from simple reporting to sophisticated business decisioning. Today, Sutherland is leveraging data analytics in combination with AI to give its clients a comprehensive picture of their customers. These insights allow them to not only better serve the customers they already have, but to find new customers earlier than ever before.

These capabilities include:

• Identifying customers at-risk for searching for a new loan (i.e. customers most likely to have a life event that would cause them to shop for a new loan)

• Identifying customers shopping for new loans

• Identifying new products to promote to customers

Identifying borrowers early in the process is more important than ever in the current market environment, which saw the number of loan originations plummet to a three-year low in Q1 2017 and remained 12% down in the second quarter from the same time in 2016.7 Headwinds like low inventory and rising prices mean that lending will continue to be extremely competitive for the foreseeable future.

Improving the customer experience is paramount to meeting the expectation of today’s consumers. Sutherland harnesses data insights and the expertise gained across multiple industries to help mortgage companies identify opportunities in their process and develop real solutions. Sutherland tailors customer journey mapping for each client, from targeted consultations to full-blown immersive projects in its London and San Francisco labs.

Customer journey mapping: enhancing the borrower experience.

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For one recent customer, a large U.S. lender, Sutherland conducted an all-day session in the lab with the client. From those discussions, Sutherland met with 12 different customers of that lender in their homes, including past customers who were dissatisfied, to learn about their experience. The in-home visits were well-received by the customers, gaining visibility to true empathy exhibited by the lender. Sutherland’s lab team includes technical staff and design experts, which synthesized the customer feedback, tested solutions, and delivered 20 specific, game-changing recommendations within the next week.

For another client, Sutherland implemented voice biometrics to offer the bank’s customers an easier and faster means of authentication. Customers can now subscribe to the voice biometrics with a common passphrase and are assigned a secret passphrase which matches individual characteristics in the person’s voice against the phrase in the enrolled voiceprint, thus authenticating their identity. In effect, callers use a vocal password which significantly improves the customer experience and decreases agent handling time.

Understanding the specific pain points of each lender and then addressing those areas with appropriate solutions is a hallmark of Sutherland’s customer journey mapping capabilities, and a game changer for its clients.

The power of three

While all three solutions work well on their own, mortgage companies gain even more by combining RPA with data analytics and customer journey mapping. Together these solutions leverage Sutherland’s extensive experience in process transformation, from analysis to seamless integration. Sutherland currently reviews 4.5 million loan documents, processes more than 360,000 loans and supports $45 billion total volume for its clients. Its executive leadership team has an average of 18 years in the mortgage industry and oversees 1,500 mortgage professionals with significant experience processing, underwriting, closing, servicing and auditing mortgages.

As mortgage companies look to optimize their operational performance, partnering with Sutherland gives them smarter tools to not only comply with increasing regulations but increase customer satisfaction in the process.

WP-1017 \\ © 2017, Sutherland Global, Inc. All rights reserved. Please Recycle

As a process transformation company, Sutherland rethinks and rebuilds processes for the digital age by combining the speed and insight of design thinking with the scale and accuracy of data analytics. We have been helping customers across industries from financial services to healthcare, achieve greater agility through transformed and automated customer experiences for over 30 years. Headquartered in Rochester, N.Y., Sutherland employs thousands of professionals spanning 19 countries around the world.

Is your organization ready for a new model of process transformation that puts exceptional customer experiences first? For more information on how we can help you transform your process to optimize the customer experience, please visit us at www.sutherlandglobal.com, email us [email protected], or call 800-388-4557 ext.6123.

Sources:

1. https://www.mba.org/2017-press-releases/june/independent-mortgage-bank-volumes-decrease-production-profits-drop-in-1st-quarter-2017

2. http://issues.secondarymarketingexec.com/article/a-new-generation-of-hmda/

3. https://www.pwc.com/us/en/consumer-finance/consumer-lending-radar.html

4. White paper: Robotic Process Transformation and the Drive for an Improved Customer Experience.

5. https://www.pwc.com/us/en/consumer-finance/consumer-lending-radar.html

6. https://www.marketwatch.com/story/9-jobs-robots-already-do-better-than-you-2014-01-27

7. https://www.attomdata.com/news/mortgage-and-finance/q2-2017-u-s-residential-loan-origination-report/