Embed Size (px)
Citation preview
Digital mortgage transformation: a foundational change
Ryan [email protected]+1 617 585 0365Ernst & Young LLP
Maurice [email protected]+1 214 969 8404Ernst & Young LLP
Nikhil LelePrincipalNew [email protected]+1 212 773 1996Ernst & Young LLP
Paul NagaiPrincipalNew [email protected]+1 212 773 9337Ernst & Young LLP
Houman TalebzadehPrincipalLos [email protected]+1 213 977 3709Ernst & Young LLP
Daniel ThainExecutive [email protected]+1 704 338 0621Ernst & Young LLP
Contacts EY | Assurance | Tax | Transactions | Advisory
About EYEY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on ourpromises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For moreinformation about our organization, please visit ey.com.
Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited operating in the US.
EY is a leader in serving the global financial services marketplaceNearly 51,000 EY financial services professionals around the world provide integrated assurance, tax, transaction and advisory services to our asset management, banking, capital markets and insurance clients. In the Americas, EY is the only public accounting organization with a separate business unit dedicated to the financial services marketplace. Created in 2000, the Americas Financial Services Organization today includes more than 11,000 professionals at member firms in over 50 locations throughout the US, the Caribbean and Latin America.
EY professionals in our financial services practices worldwide align with key global industry groups, including EY’s Global Wealth & Asset Management Center, Global Banking & Capital Markets Center, Global Insurance Center and Global Private Equity Center, which act as hubs for sharing industry-focused knowledge on current and emerging trends and regulations in order to help our clients address key issues. Our practitioners span many disciplines and provide a well-rounded understanding of business issues and challenges, as well as integrated services to our clients.
With a global presence and industry-focused advice, EY’s financial services professionals provide high-quality assurance, tax, transaction and advisory services, including operations, process improvement, risk and technology, to financial services companies worldwide.
© 2017 Ernst & Young LLP.All Rights Reserved.
SCORE no. 05936-171US 1710-2436983 BDFSOED None
ey.com
As customer expectations have evolved and competition from nonbank market entrants has expanded, large mortgage banks require a rapid shift in both digital capabilities and strategic mindset.
Digital capabilities are transforming the full mortgage life cycle
Origination• Workflow-enabled straight-through
processing, reducing need for manual keying, intervention by processor
• Data verification of credit, income, identity and title insurance via third-party integration to origination system
Point of sale (POS)• Engaging tools and calculators,
providing customers with indicative pricing and product availability upfront
• Simple online application that captures, validates and provides conditional decisions instantly
Underwriting• Automated sourcing from application;
submitted documents with alerts for missing information
• Conditional approvals POS platform engine analytics succinctly highlighting red flags and resolution options
Closing• Expanded use of electronic signatures
(e.g., DocuSign), eNotarization where available; promoting detailed borrower review prior to closing
• Hybrid process enabled for documents requiring wet signature at closing
Secondary marketing• Linkage with investor underwriting
platforms to accelerate borrower decisioning and loan sales
• Enrollment in programs, such as Day 1 Certainty, to streamline required verification activities
Servicing and default• Multichannel account access, real-time
status, and straight-through and self-service transaction processing
• Proactive outreach and service offerings based upon predictive analytics
Disciplined investing creates sustainable results
As nonbanks were 6 of the top 10 largest lenders by volume last year, traditional banks can no longer delay investing in digital technology or should partner with FinTechs to enhance their offerings and slow erosion in market share.1
Link to business strategy. Organizations must define their business strategy and target investments in digital-mortgage capabilities that directly align. In areas where a bank is currently unable to deliver on customer expectations, third-party providers can augment existing tools, processes and capabilities and promote an accelerated timeline to the target-state digital mortgage.
Foundational capabilities. Creation of a flexible, application-programming interface-enabled technology foundation will enable the organization to quickly adapt to innovation in the marketplace and changing customer needs. Transforming to a software-as-a-service (SaaS) model enables internal technology teams to focus their efforts on innovation and continuous improvement vs. maintenance of complex legacy systems.
Prioritized initiatives. Clear priorities to deliver innovative services and build a strong, flexible foundation are required to make sure that investments align with market, efficiency and control objectives. Executive commitment to a unified vision is critical to success in large transformational efforts.
1 “Banks No Longer Make the Bulk of U.S. Mortgages," The Wall Street Journal, https://www.wsj.com/articles/banks-no-longer-make-the-bulk-of-u-s-mortgages-1478079004, accessed 9 October 2017.
EY brings the resources and methodology to guide your digital mortgage transformation
We are assisting leading institutions to redesign their mortgage operations to meet the challenges of a new digital era where flexibility, innovation, customer centricity and compliance will be critical to market success.
Growth-oriented transformation Sustainable operations Platform transformation
Serv
ices
Enhancing customer experience
• Business and operating strategy
• Customer and user journey
• Digital enablement
• FinTech evaluation and integration
• Merger and acquisition integration
• Customer relationship management
• Omnichannel transformation (mobile, online, branch, voice, mail)
• Profit optimization analysis
• Asset performance enhancement
• Predictive customer and portfolio analytics
Simplified business model and sustainable operations
• Operating model assessment, design, transformation
• Expense and operating efficiency analysis
• Process assessment, re-engineering, implementation
• Automation and infrastructure (cloud hosting, robotics, machine learning, imaging, optical character recognition (OCR) and eSign)
• Change road map and business case development
• Regulatory compliance assessment
• Controls and reporting assessment and design
• Data and analytics design
Transforming and augmenting core operational systems and infrastructure
• Core system conversion and upgrade (point of sale, origination, servicing, default management, secondary marketing)
• Digital platform enablement (design, architecture and development)
• Managed service utilization and enablement
• Transition to/from managed service and hybrid models
Goals • Acquire and retain customers
• Increase profitability
• Acquire assets
• Improve productivity
• Balance fixed and variable costs
• Promote quality and compliance
• Select providers
• Upgrade and replace applications
• Insource and outsource operations
Foundational changes are required to support this transformation
Implementing a holistic digital mortgage program will require a demonstrable shift from existing legacy strategies. Strong commitment to the journey will enable a superior customer experience, while reducing operational expenses.
From To
Advanced analytics
Reactive, exception-based reporting and metrics, providing a retrospective view of custom behaviors and operational performance
Proactive analysis of big data, providing insights into potential opportunities, predictive behaviors and projected operating performance
Straight-through processing
Fragmented process of data and documents housed in disconnected systems and repositories
Frictionless flow of data through entire product life cycle, accelerating decisions, request facilitation and compliance
Paper suppression and elimination
Bulky, inconvenient paper-based product origination and servicing, providing infrequent touch points with customers
Multichannel data collection and integration with information aggregators, and real-time updates for account transparency
Platform thinking
Proprietary, outdated transactional processing supplemented with wrapper technology, requiring significant maintenance effort and slow waterfall change programs
Cloud-based, open application programming interface (API) platforms providing flexible capabilities that can quickly respond to market and regulatory demands
Data management and integrity
Legacy data distributed across multiple disconnected repositories, leading to compliance, performance and security management challenges
Integrated data sources, coupled with strong biometric authentication and security protocols, providing real-time view of customers and performance
Managed services
High fixed costs supporting quality, accounting, oversight and specialized clerical activities
Nimble, specialized capabilities provided under a variable cost model, allowing institutions to increase quality and manage costs
Digital mortgage transformation: a foundational change | 1 Digital mortgage transformation: a foundational change | 2
Disciplined investing creates sustainable results
As nonbanks were 6 of the top 10 largest lenders by volume last year, traditional banks can no longer delay investing in digital technology or should partner with FinTechs to enhance their offerings and slow erosion in market share.1
Link to business strategy. Organizations must define their business strategy and target investments in digital-mortgage capabilities that directly align. In areas where a bank is currently unable to deliver on customer expectations, third-party providers can augment existing tools, processes and capabilities and promote an accelerated timeline to the target-state digital mortgage.
Foundational capabilities. Creation of a flexible, application-programming interface-enabled technology foundation will enable the organization to quickly adapt to innovation in the marketplace and changing customer needs. Transforming to a software-as-a-service (SaaS) model enables internal technology teams to focus their efforts on innovation and continuous improvement vs. maintenance of complex legacy systems.
Prioritized initiatives. Clear priorities to deliver innovative services and build a strong, flexible foundation are required to make sure that investments align with market, efficiency and control objectives. Executive commitment to a unified vision is critical to success in large transformational efforts.
1 “Banks No Longer Make the Bulk of U.S. Mortgages," The Wall Street Journal, https://www.wsj.com/articles/banks-no-longer-make-the-bulk-of-u-s-mortgages-1478079004, accessed 9 October 2017.
EY brings the resources and methodology to guide your digital mortgage transformation
We are assisting leading institutions to redesign their mortgage operations to meet the challenges of a new digital era where flexibility, innovation, customer centricity and compliance will be critical to market success.
Growth-oriented transformation Sustainable operations Platform transformation
Serv
ices
Enhancing customer experience
• Business and operating strategy
• Customer and user journey
• Digital enablement
• FinTech evaluation and integration
• Merger and acquisition integration
• Customer relationship management
• Omnichannel transformation (mobile, online, branch, voice, mail)
• Profit optimization analysis
• Asset performance enhancement
• Predictive customer and portfolio analytics
Simplified business model and sustainable operations
• Operating model assessment, design, transformation
• Expense and operating efficiency analysis
• Process assessment, re-engineering, implementation
• Automation and infrastructure (cloud hosting, robotics, machine learning, imaging, optical character recognition (OCR) and eSign)
• Change road map and business case development
• Regulatory compliance assessment
• Controls and reporting assessment and design
• Data and analytics design
Transforming and augmenting core operational systems and infrastructure
• Core system conversion and upgrade (point of sale, origination, servicing, default management, secondary marketing)
• Digital platform enablement (design, architecture and development)
• Managed service utilization and enablement
• Transition to/from managed service and hybrid models
Goals • Acquire and retain customers
• Increase profitability
• Acquire assets
• Improve productivity
• Balance fixed and variable costs
• Promote quality and compliance
• Select providers
• Upgrade and replace applications
• Insource and outsource operations
Foundational changes are required to support this transformation
Implementing a holistic digital mortgage program will require a demonstrable shift from existing legacy strategies. Strong commitment to the journey will enable a superior customer experience, while reducing operational expenses.
From To
Advanced analytics
Reactive, exception-based reporting and metrics, providing a retrospective view of custom behaviors and operational performance
Proactive analysis of big data, providing insights into potential opportunities, predictive behaviors and projected operating performance
Straight-through processing
Fragmented process of data and documents housed in disconnected systems and repositories
Frictionless flow of data through entire product life cycle, accelerating decisions, request facilitation and compliance
Paper suppression and elimination
Bulky, inconvenient paper-based product origination and servicing, providing infrequent touch points with customers
Multichannel data collection and integration with information aggregators, and real-time updates for account transparency
Platform thinking
Proprietary, outdated transactional processing supplemented with wrapper technology, requiring significant maintenance effort and slow waterfall change programs
Cloud-based, open application programming interface (API) platforms providing flexible capabilities that can quickly respond to market and regulatory demands
Data management and integrity
Legacy data distributed across multiple disconnected repositories, leading to compliance, performance and security management challenges
Integrated data sources, coupled with strong biometric authentication and security protocols, providing real-time view of customers and performance
Managed services
High fixed costs supporting quality, accounting, oversight and specialized clerical activities
Nimble, specialized capabilities provided under a variable cost model, allowing institutions to increase quality and manage costs
Digital mortgage transformation: a foundational change | 1 Digital mortgage transformation: a foundational change | 2
Digital mortgage transformation: a foundational change
Ryan [email protected]+1 617 585 0365Ernst & Young LLP
Maurice [email protected]+1 214 969 8404Ernst & Young LLP
Nikhil LelePrincipalNew [email protected]+1 212 773 1996Ernst & Young LLP
Paul NagaiPrincipalNew [email protected]+1 212 773 9337Ernst & Young LLP
Houman TalebzadehPrincipalLos [email protected]+1 213 977 3709Ernst & Young LLP
Daniel ThainExecutive [email protected]+1 704 338 0621Ernst & Young LLP
Contacts EY | Assurance | Tax | Transactions | Advisory
About EYEY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on ourpromises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For moreinformation about our organization, please visit ey.com.
Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited operating in the US.
EY is a leader in serving the global financial services marketplaceNearly 51,000 EY financial services professionals around the world provide integrated assurance, tax, transaction and advisory services to our asset management, banking, capital markets and insurance clients. In the Americas, EY is the only public accounting organization with a separate business unit dedicated to the financial services marketplace. Created in 2000, the Americas Financial Services Organization today includes more than 11,000 professionals at member firms in over 50 locations throughout the US, the Caribbean and Latin America.
EY professionals in our financial services practices worldwide align with key global industry groups, including EY’s Global Wealth & Asset Management Center, Global Banking & Capital Markets Center, Global Insurance Center and Global Private Equity Center, which act as hubs for sharing industry-focused knowledge on current and emerging trends and regulations in order to help our clients address key issues. Our practitioners span many disciplines and provide a well-rounded understanding of business issues and challenges, as well as integrated services to our clients.
With a global presence and industry-focused advice, EY’s financial services professionals provide high-quality assurance, tax, transaction and advisory services, including operations, process improvement, risk and technology, to financial services companies worldwide.
© 2017 Ernst & Young LLP.All Rights Reserved.
SCORE no. 05936-171US 1710-2436983 BDFSOED None
ey.com
As customer expectations have evolved and competition from nonbank market entrants has expanded, large mortgage banks require a rapid shift in both digital capabilities and strategic mindset.
Digital capabilities are transforming the full mortgage life cycle
Origination• Workflow-enabled straight-through
processing, reducing need for manual keying, intervention by processor
• Data verification of credit, income, identity and title insurance via third-party integration to origination system
Point of sale (POS)• Engaging tools and calculators,
providing customers with indicative pricing and product availability upfront
• Simple online application that captures, validates and provides conditional decisions instantly
Underwriting• Automated sourcing from application;
submitted documents with alerts for missing information
• Conditional approvals POS platform engine analytics succinctly highlighting red flags and resolution options
Closing• Expanded use of electronic signatures
(e.g., DocuSign), eNotarization where available; promoting detailed borrower review prior to closing
• Hybrid process enabled for documents requiring wet signature at closing
Secondary marketing• Linkage with investor underwriting
platforms to accelerate borrower decisioning and loan sales
• Enrollment in programs, such as Day 1 Certainty, to streamline required verification activities
Servicing and default• Multichannel account access, real-time
status, and straight-through and self-service transaction processing
• Proactive outreach and service offerings based upon predictive analytics
