The mortgage industry has been recently experiencing a significant digital transformation. Experts have pointed out that the technological shift has been accelerated by two chief factors – the need to deal with the challenges brought about by the pandemic and the rise in tech-savvy home buyers.
The pandemic and ensuing lockdowns ushered in a new era of technology in mortgage born mainly from necessity. Lenders realized that to serve the borrowers of the future, they will need to create online experiences that reverberate with the millennial crowd who expect amazing customer service online.
People planning to purchase or refinance a home started looking for lenders who provided online tools to complete their mortgage loans process from home. Studies have shown that a vast majority of lenders (99%) feel that technology has helped improve the mortgage application process, citing benefits such as streamlining the overall process (74%), reducing time to close (70%), and minimizing data entry (67%).
Use of machine learning and artificial intelligence to improve services
Although some areas of the financial services industry had integrated AI and ML before 2020, the mortgage industry had not experienced widespread adoption. But now, the industry is increasingly leveraging advanced automation technology for delivering smart solutions.
The mortgage industry is data-intensive and requires many repetitive tasks, like document handling and verifying application forms. Technology like AI and ML is extremely effective at analyzing large amounts of data and is useful in training systems to perform cognitive tasks, like classifying information, forecasting ability to pay, and recommending approval or denial decisions. Mortgage lenders are now relying on this technology to drive the lending process from loan origination, processing, underwriting, closing, and funding.
AI and ML have also brought in tremendous opportunities in mortgage for the use of data to generate insights and make accurate and reliable decisions in seconds. While mortgage lending processes can be time-consuming and tedious for lenders as well as borrowers, AI has helped to a very large extent to streamline the workflows. With the onset of predictive analytics, human intervention is reduced and the decision-making is automated. AI can reduce the turnaround time of mortgage loans by effectively speeding up the data gathering, reviewing, analyzing, verifying, and digitizing process.
The result is that the holistic mortgage process becomes faster and more accurate increasing overall productivity and improving the customer experience.
Increasing API adoption to streamline company processes
A very effective way of leveraging technology has been the use of application programming interfaces (API) to help mortgage lenders improve efficiency. Its uses include workflow automation, ensuring data accuracy, and facilitating regulatory compliance.
It has now become imperative to streamline the back-office work with appropriate technology when it comes to realizing a return. Lack of efficiency in back-office operations can affect loan processing speeds as well the entire loan process reducing the saleability of loan products overall.
APIs present significant opportunities to improve many parts of the mortgage process, increasing speed and operational efficiency while improving the experience for all stakeholders including customers, brokers, and lenders.
More collaboration among fintech companies
A McKinsey study has observed that when it comes to digital banking, consumers now want a more flexible journey. About 71% prefer multi-channel interactions and 25% want a fully digitally-enabled journey with remote human assistance available when needed. Since every fintech company may not have all the required digital expertise, it has become increasingly evident that the time is right for more collaboration between companies where one can benefit from the other’s knowledge.
Such collaborative partnerships among fintechs are proving valuable by delivering new offerings to satisfy the wants and needs of customers. They are leveraging existing financial services infrastructure to provide useful and time-saving tools for consumers as well as industry.
To meet customers’ demand for speed, efficiency, and a better user experience, fruitful partnerships will enable fintechs to offer a frictionless experience and make a bigger impact.
How PrivoCrop can help
Given that now is the time for lenders to optimize the best of technology, PrivoCrop is the right partner for support in combining technology and mortgage domain experience to enhance the overall mortgage experience. The company offers back-office support right from setup to Post-closing.
PrivoCrop offers lenders end-to-end fulfillment to help them save time and cost while providing them a competitive advantage. It is the only service provider that serves banks as well as mortgage lenders with a full scale of services in a mortgage lifecycle. With more than a decade of experience working with customers, self-motivated teams, automated workflows, and intelligence powered by AI and Machine Learning technologies, PrivoCrop ensures operational efficiency and customer satisfaction for its clients.