The Role of AI and RPA in Loan & Mortgage Processing

For most lenders, mortgages represent the most significant liquid asset in their lending repertoire. Conventional mortgages and jumbo mortgages both fair well on the secondary mortgage marketplace, and issuing qualifying mortgages keeps funds and capital flowing steadily in to reinvest in other programs. But, for many, tried-and-true mortgage frameworks are collapsing under the wrath and ire of COVID-19.

Manual touchpoints are a barrier to rapidly expedite applications, especially since consumers are pampered by non-lending industries with best-in-class technologies and speedy results. According to Deloitte, if lending institutions are to position themselves for the post-crisis economy "re-imagining business processes with technology-enabled business transformation" is a must.

That's a broad statement. Let's talk about two technologies that are relevant right now — not as mid-horizon competitive advantages that take years to implement. Robotic Process Automation (RPA) and AI — both of which play off of each other in an almost orchestral way — are two immediately valuable technologies that digitally transform lending. And there's never been a more apt time to chase digitization, especially in the wake of COVID-19-induced market complexities.

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Understanding the Role of AI in Mortgage Processing

To put it simply, most lending institutions admit defeat to the digital age. Non-depository originators have stolen 25% of the market over the past 5 years. And digital-only lending solutions have taken a serious bite out of the mortgage market — both for origination and refinancing. Here's the dirty truth: only 42% of borrowers say they're satisfied with the lending process.

It makes sense. Traditional mortgages take weeks to fully process using archaic, manually-intensive workflows. And, despite the surge of digital transformation in the consumer sector, many lending institutions have yet to fully embrace the digital renaissance. But, for those that have, the results are staggering. Benelux bank redesigned its entire lending process from end-to-end using automation and process automation. According to McKinsey, it saw 30% greater efficiencies within the year. McKinsey also noted a Scandinavian bank that redesigned its application process using automated decision-making solutions (i.e., RPA) to create greater efficiencies throughout the entire mortgage pipeline.

These types of stories aren't a dime-a-dozen. They're growing at a staggering rate. Instead of manually checking and inputting data from every loan application, AI allows lenders to instantly target and identify anomalies, scout out critical information, and feed precious data back into core systems. But, AI doesn't act alone. It's a facilitator. It needs a few helping hands to be meaningful. And we don't mean physical hands.

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RPA: The "Now" of Mortgage Processing

Robotic process automation (RPA) is a rule-based automation solution that tackles simple and complex workflows with software robots. AI and RPA work together as a cohesive unit. Deep learning-powered AI can fully digest loan frameworks, growing smarter with each incoming application. RPA automatically fulfills workflow needs, such as data entry and error checking. Combined, these two technologies facilitate rapid, end-to-end loan approvals.

This isn't a twinkling technology floating on the edge of the horizon. Bancolombia used RPA back in 2017 to automate 40 business processes. Within the year, they reduced operating costs by $1.4 million and increased revenue by $1.4 million. That's the start. RPA gets smarter, more efficient, and more robust as time goes on. Each year, those cost savings and revenue jumps increase.

There's a strange disconnect in the lending space. 12% of financial services organizations believe they're mature in their digital transformation efforts. Yet, 80% of financial services institutions say that their primary goal over the next 12 months is to modernize their IT systems. We're all chasing digital transformation. But the financial services industry seems to have some issues achieving those goals.

Implementing RPA won't make you a completely digitally-transformed business, but it is a launchpad to get you there. The initial burst of revenue and expense reduction fueled by RPA (especially when combined with the aforementioned AI) is substantial enough to peak stakeholder interest in larger tech investments.

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How DRS Can Help

At DRS, we live by the motto: "Capture. Classify. Manage. Automate. Integrate."

Historically, these have all been pain points in the mortgage process. Mortgage ingestion requires storage solutions, compliance checks, and manual touchpoints to verify document requirements. Classification requires built-from-scratch audit trails and complex cataloging frameworks that comply with ever-changing regulatory needs. Managing mortgages (both pre and post-close) forces you to spend countless people hours double-checking variables and gathering validation. Automation is virtually non-existent. And integration is stifled by siloed systems and legacy architectures that create disconnected data lakes and disjointed, proprietary clouds.

DRS can help you flip that upside down.

Not only do we offer AI and RPA-enabled solutions that learn your data needs and help you perform mundane, time-consuming mortgage tasks (e.g., verification, data entry, etc.) in a matter of seconds, but we also provide best-in-class security and compliance architectures, storage solutions, and digitization solutions to help you make the most out of every data point. Plus, you can instantly integrate our solutions with leading line-of-business systems (e.g., Oracle, Jack Henry, SAP, Sharepoint, Ellucian/Banner, etc.)

It's important to understand that the raw value of RPA and AI is versatility. Every lender has a semi-unique mortgage processing framework. RPA allows you to define rule-based scenarios that work within the context of your existing framework. In other words, DRS doesn't just offer a cookie-cutter workflow automation software. We offer tangible automation potential with easy-to-use and easy-to-understand RPA and AI solutions.

Digital transformation should happen on your terms, not on the terms of your SaaS solution. Our ECM and RPA solutions create robust, holistic digital ecosystems that leverage your existing processes. This makes it easy to improve processes without hitting the all-too-common roadblock of familiarity friction.

Are You Ready to Transform?

Are you tired of slow-as-molasses loan fulfillment processes putting you at a competitive disadvantage? Do you want to expedite your loan issuing services and maximize your revenue? At DRS, we help financial services companies achieve digital transformation without the added hype and buzzword-crazy marketing schemes. Want to experience concrete, meaningful, and immediately-valuable digital transformation solutions? Contact us to start future-proofing your lending institution.