Mortgage Industry And Robotic Process Automation: A Match Made In The Automation Heaven
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Mortgage Industry And Robotic Process Automation: A Match Made In The Automation Heaven

Niyogi Krishnappa

The ever-changing, heavily-regulated and competitive mortgage industry is rapidly evolving to meet the digital demands of tech-savvy customers, reduce the cost of operations, increase efficiency and be compliant. Digital transformation has impacted the mortgage Industry in a big manner. Over the last few years, technology has been at the forefront of shaping the direction of the Mortgage industry. Mortgage lenders are embracing disruptive technologies such as Artificial Intelligence (AI), Robotic Process Automation (RPA), Chatbots, etc. to gain a competitive advantage.

The average per-loan cost to originate a mortgage in the US is around $8,475 and takes around 46 days. Given the above statistic and the process-oriented nature of the mortgage industry, the RPA has emerged as the technology most impacting the industry. It has been a driving force in helping lenders improve on loan processing time, quality, compliance and cost challenges head-on, and help realize a faster time to revenue. Though relatively new on the horizon, RPA has already starting to dramatically streamline the mortgage lending process.

What is RPA?

In this context, Robotic Process Automation or RPA refers to the use of software to “mimic” the actions of a human user while performing the same activity at scale. RPA enables organizations to automate repetitive, mundane and rule-based tasks as if a real person was doing them across applications via existing user interfaces. RPA Implementation involves front-end integration without any changes to existing IT infrastructure.

RPA In Mortgage Lending

Given the nature of processes in the mortgage industry, which are complex but highly rule-based and structured, with various systems involved, RPA is incredibly advantageous. These software robots can assist in plugging the gaps created by disjointed systems without extensive integration requirements or a massive IT budget.

Consider the following example wherein a customer is asked to provide a certain document to support the mortgage loan documentation. In response, the customer takes a snap of the document and mails it across to the loan processing officer for further processing. In the traditional method, the loan processor would receive the email, open the attached document, enter the details on one or more systems and inform the customer that they have received and updated this document. Imagine this scenario for hundreds of customers sending across multiple types of document. In an automated world, all these could be handled by the RPA bots and only exceptions would be routed to loan processing officers. It’s these mundane, oft-repeated tasks that are low hanging fruits for implementing RPA.

Given that mortgage lenders are looking for solutions that can deliver short-term wins while impacting the company’s objective in a big manner, RPA represents an incredible opportunity to fundamentally change the way mortgage lenders work. RPA implementation in mortgage banks would allow the employees to focus on strategic, value-added activities which can result in better customer experience, while the bots can be leveraged to significantly improve loan processing.

The main area where RPA can be leveraged for Mortgage is in Loan origination and processing. Through the application of rule-based algorithms, RPA solutions can ensure data is more accurate, increase turnover time and implement better reporting. These can be achieved by automating repetitive and time-consuming manual tasks. This includes verification of pre-funding data, tasks related to ordering services such as credit, title, flood, etc. Quality audits of documentation submitted etc. RPA

Given the high expectations from mortgage lenders to demonstrate not only compliance to the complex government regulations but also manage the risks associated with these compliances, the other important area where RPA can be applied in the mortgage industry is Risk and Compliance oversight. Implementation of RPA has not only resulted in the reduction of risks from human errors, but it has also robust compliance reporting and risk mitigation.

RPA is shaping up to be a game changer in underwriting for the mortgage industry. Given that RPA can gather, and process data related to the mortgage applicant from both internal and external sources, it would result in freeing up 20%-30% of underwriters time resulting in faster time and more accurate reports. Additionally, the application of Cognitive Process Automation to underwriting would enable lenders to improve how they determine and underwrite their exposure to risk.

Benefits of RPA in Mortgage

The high degree of manual processing in the mortgage industry is costly and impacts customer loyalty, compliance and revenue realization. The banks are looking at Robotic Process Automation as a potential solution to the operational, regulatory and financial challenges that they face. The broad areas where RPA has an impact on the mortgage industry is as follows:

  • Close Loans Faster – RPA would help in reducing the average time required to process a mortgage loan resulting in reduced cost and increasing the efficiencies. This also helps in delivering more loans in less time.
  • Higher Data Accuracy – Implementing RPA would result in higher data accuracy as the automation would help remove the errors that creep in because of human intervention.
  • Better Customer Experience – Deploying RPA enables an organization to dedicate the time of their employees to ensure the optimal customer experience is delivered. It also helps in increasing the services levels.
  • Risk mitigation – RPA implementations results in higher quality verified data, which produces a higher level of compliance and a higher degree of risk mitigation.
  • Disruption to existing systems – Given that RPA is built on top of existing systems and hence there is no need to replace/upgrade existing systems, applications or infrastructure. Also, they require shorter implementation time and carry lower risk than large IT transformations.

Mortgage lenders have just started to scratch the surface of the benefits of RPA. They can realize the optimal value in the long run by having a well thought out strategy and by making investments in a robotic workforce.

Robotic process automation solutions can help mortgage banks improve the effectiveness of services faster and at a lower cost than current methods. Learn exactly how much can your Bank save through the implementation of RPA by visiting our RPA inquiry page.

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Opteamix is a US-based global technology firm delivering crafted technology solutions and services that enable industries to reach their full potential. Since our inception in 2012, we have focused on positioning ourselves as trusted technology partners and digital enablers, recognizing the need and complexity involved in using technology to create digital disruption.