What mortgage providers need to know

These fragmented, repetitive tasks not only delay things, they also work in the shade. Because they are not digitized, we have no access to performance data that we can analyze, refine and improve. That means valuable opportunities to increase the margins, shorten cyclist times and better operate, borrowers are often completely missed.

So where does automation come in?

These kinds of hidden manual workflows are ideal candidates for automation. But solving them is rarely simple and rarely cheap. Although it is tempting to see automation as a silver bullet, the actual costs to implement it, especially in the mortgage space, are much more complex.

Custom development: tailor -made … but at what costs?

Some lenders go to adapted development to build in-house automation solutions. Although it offers potential for customized tools, it comes with heavy considerations:

• High costs in advance: from design to development and testing, adapted projects require large capital and time investments.
• Technical debt and maintenance: what works today cannot scale. Teams often notice that they are constantly rewriting or rewriting codes to adapt to changing needs or regulations.
• Integration headache: Legacy Loan Origination Systems (LOS), CRM tools and document management systems often do not play well together, for which extensive adapted interfaces are required.
• Security and compliance risks: In a heavily regulated industry such as mortgage loans, the burden to ensure that compliance is square in your team.
• Innovation delay: As technologies such as AI and process mine construction evolve, adapted tools can quickly become outdated, so that more investments are needed to remain relevant.

In short, although adapted development gives you control, it rarely delivers something that money lenders now need more than ever.

RPA, IDP and OCR: powerful but piece with pieces

Point solutions such as Robotic Process Automation (RPA), Intelligent Document Processing (IDP) and Optical Character Recognition (OCR) have risen in popularity. Each can automate specific tasks, such as drawing data from PDFs or copying information between systems.

But separately these tools often do not deliver real operational transformation.

• High total ownership costs: licenses, infrastructure, training and maintenance will occur quickly.
• Limited ROI in dynamic environments: mortgage processes are liquid, legal environments shifting and changing loan products. Tools built for static workflows are struggling to adjust.
• Fragmentation: relying on a patchwork of automation tools often does not lead to more complexity.

Without a strong process board and a uniform strategy, these solutions become expensive plasters.

Automation platforms: The Golden Standard, when you’re done

Low-code automation platforms promise a wider, more strategic approach. And they can deliver, but only if you have the right basis.

This is what many lenders do not expect:

• Ramp-up time: these platforms require skilled sources. It can take months for internal teams to become skilled enough to build meaningful solutions.
• Costs for professional services: Most suppliers offer services to help build your first automation, but at a costs. In some cases, the costs of that first project correspond to or exceed your original license investment.
• Hidden dependencies: If your project still requires RPA or IDP components, those licenses and integration efforts will stack quickly.
• Return on Investment (ROI): Without a 3-5-year-old automation roadmap and special internal support, most organizations struggle to realize meaningful ROI.

A smarter path ahead: strategic partnership

So what is the solution?

For mortgage lenders who want to automate but do not have time or resources to build up an entire automation practice, it is possible to collaborate with a trusted expert the best way ahead.

A strategic automation partner brings:

• Domain expertise: deep understanding of mortgage workflows, legal concerns and operational bottlenecks.
• Properly accelerators: templates and tools that are tailored to industry that shorten development time.
• Technology Agility: the possibility of mixing AI, Custom DEV, Low Code Automation Technologies, BPO, RPA, IDP, OCR and wider platforms in a coherent solution – without the technical debt.

Sometimes the right partner can help you prevent the pitfalls of do-it-yourself automation while accelerating time to value. Whether you are a credit union, independent mortgage bank or fintech lender, automation must improve your company and not take care of it.

Danny Torbett is the director of technology sales for Moder.

This column does not necessarily reflect the opinion of the editorial department of Housingwire and the owners.

To contact the editor who is responsible for this piece: [email protected].