TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/1491913
22 | M R EP O RT COVER STORY dollars per loan, which can be vital given the current state of the industry. Reicher: A few of my favorites are robotic process automation (RPA), virtual agents, and speech recognition. RPA continues to accelerate transformation by improving effectiveness and accuracy, reducing operational risk, boosting productivity, improving compliance, and most importantly, creating value for employees by allowing them to focus on more strategic work. RPA has a rapid implementation model and a relatively low upfront investment to get started. Virtual agents are proving not only highly effective but are critical to the customer digital experience. With the increase in the digital adoption of mortgages, customers expect immediate response times and 24/7 availability. Virtual agents can be used to address frequently asked questions and common interactions, allowing their human counterparts to focus on exceptions and escalations. Add to that sentiment analysis and a well-designed, warm hand-off between the two, and you've fully maximized the digital experience. Speech recognition is quickly becoming a staple technology in the digital mortgage space. By analyzing speech in real-time, call center representatives can more effectively and efficiently respond to customer inquiries and requests. Leveraging automation on top of speech recognition can supplement and expand the representative's knowledge of the customer. In addition, speech recognition allows for 100% quality control, ensuring compliance with the rules and regulations required from regulators and the government- sponsored enterprises (GSEs). Vinci: Several technologies have become vital to the mortgage process. Many of these are centered on streamlining borrower interactions, including digital mortgage platforms for real time submission and updates, eSignatures, eClosings, and mobile notary/remote online notarization (RON). Behind the scenes, there has been widescale adoption of business rules engines to facilitate exception and compliance management, robotic process automation to streamline frontline and back-end processes, and data analytics and predictive analysis to help with underwriting, impact analysis and quality control processes. Additionally, the advancements in information security, especially around endpoint detection and response, FIDO2, zero trust and phish-resistant multifactor authentication, are helping to ensure we keep our customers' data safe with minimal burden to the end user. Do you feel the mortgage tech space is growing or constricting in this current environment? Camerieri: In terms of the solutions we offer and the impact we're having on the lending business, I think we're expanding at a very rapid pace. New software architectures and cloud-based infrastructures have finally allowed lenders to choose their process and then select the technology to empower it instead of the old way of choosing technology and then selecting the partners and workflows it enables. Volumes are down and the current estimates say this year will be slower than we're used to, but that is having little, if any, impact on the innovation taking place on the tech side. Graham: In a revenue basis, it is absolutely contracting because many of the systems receive a fee per funded loan, and the units are down so much. In 2021, we had more than 13 million units, and this year, we are projected to be less than five million. That is a huge drop in revenue for the total vendor space. In a down market, is it a wise move to invest in tech or wait out the market downturn? Graham: Tech spend is down, mostly because the units are down, and thus the per-funded fees are down. As a total per- centage of expense, tech is still a low number. In fact, it's roughly 5%-10% of the total spend for most lenders. Most of the expense of originating a loan is people, so you can make an argument that we spend too little on tech as an industry. The key is spending on the right solutions that lower the expense per loan, drive revenue, or drive more deals. Levin: Down markets, where volume is lower and lenders are competing more fiercely for busi- ness, are always a time for lenders to reevaluate their technology stacks. Implementations will be quicker and easier due to the need to implement them across fewer personnel with fewer trans- actions, and the efficiencies from utilizing more modern technol- ogies will help improve gain-on- sale during a period of margin compression. Mason: Definitely don't wait. If your organization has not already invested in technology that calibrates with the ups and downs of market-related pro- cesses and regulatory demands, the time to start is now. If you implement the right technology, the efficiency gains become more and more rapid over time. Your investment will lay the founda- tion for dealing with the present downturn, while reducing the costs of future "business as usual" volume. Ultimately, it puts your organization in the perfect offen- sive position to handle anything that the industry unexpectedly serves up. Sarkar: For the past two fiscal years, it has been difficult to obtain good return-on-investment (ROI) figures on technology because the market has evolved so quickly. However, now is the perfect time to invest in technol- ogy, especially since the market may improve after this year's third quarter. At a time when many companies are cutting costs and putting off spending on technology, making a sound investment in technology today can be advantageous in the years to come. Are there any pain points you are working through right now as a tech provider in the mortgage space? Danna: Our work is focused on the collateral valuation function and our technology is specifically designed to support the lender's appraisal department. This means our work is all about putting tools into the hands of these professionals that will make it easier for them to perform their function in a manner that reduces lender risk and overhead, while increasing agent and borrower satisfaction. The friction, as is so often the case, is hiding in the human touchpoints. Better in- formation provided earlier in the process in a transparent manner will reduce it, so that's what we're working on now. Graham: STRATMOR works with a lot of lenders on a range of technology spends, but one that we are focused on for 2023 is actually helping lenders quantify how their people, process, and technology impact the consumer, and what really drives satisfaction and referrals. Lenders must steal share to thrive in this market, and having a great customer experience is one key way to do that. Lenders need direct con- sumer feedback to quantify that process. Iannitti: Now more than ever, lenders are seeking to leverage mortgage technology to stream- line the overall loan process. The good news is that because we have completed this process