Digital mortgage transformation: a foundational change
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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
Enhancing customer experience
Business and operating strategy
Customer and user journey
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
Balance fixed and variable costs
Promote quality and compliance
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.
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
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
Proprietary, outdated transactional processing supplemented with wrapper technology, requiring significant maintenance effort and slow waterfall change program