TheMReport — News and strategies for the evolving mortgage marketplace.
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30 | M R EP O RT FEATURE The Automation Revolution Reaches a New Phase Most lenders have automated much of the front end of their processes, and now, Robotic Process Automation (RPA) technology is helping to automate the in-between functions. By Jimmy Lewis & Sridhar Loganathan I t's no secret that many mortgage lenders have taken significant steps to streamline their operations in recent years, mostly through modern technology. However, the focus of those efforts has trended toward the "front end" of the transac- tion: Point of Sale (POS) and Loan Origination System (LOS) platforms, as well as some effort to modernize appraisal management, compliance or document prep, extraction, and management. And yet, an ICE Mortgage Technology report found that the typical mortgage transaction costs a lender between $7,000 and $9,000 to orig- inate. It still takes more than 45 days on average from application to closing. While much progress has been made in automating "anything au- tomatable," there's still much room for improvement—so much so that a recent Acuity Knowledge Partners analysis indicates that optimizing and streamlining other parts of the mortgage process will remain a strategic priority throughout the industry despite a tepid outlook for the market in 2023. So, what's left to automate? Plenty. And while the automa- tion discussion has gone from LOS and POS to talk of special- ized technology solutions, tech stacks and the future with open API (Application Programming Interface), the mortgage process is complex enough that even now, there are still dozens of minor but necessary (and time-consuming) functions or processes that remain manual. These are the "in-be- tween" areas that automation has not fully absorbed. But now, with the use of Robotic Process Automation (RPA) technology, more commonly known as "bots," this too is changing. Bots Can Be Useful F or some, the term "bot" has a negative connotation. Bots are perceived by some as bits of code designed by retailers to track their every move or habit online. Others know bots only from their experience with rudimentary, unhelpful "chat bots," the worst of which only impede the customer experience. While "bots," like any kind of technology, are only as good as their design, purpose, and use, they are proving extremely helpful in many industries. UiPath defines RPA as "a software technology that makes it easy to build, deploy, and manage software robots that emulate human actions interacting with digital systems and software. Just like people, software robots can do things like understand what's on a screen, complete the right keystrokes, navigate systems, identify and extract data, and perform a wide range of defined actions." RPA is flexible, versa- tile, generally operates outside of existing technologies, thus not impeding other elements of the tech stack, and works 24/7/365. It is best deployed for simple, repetitive and, some would say, mundane tasks or processes. Best of all, like any useful technol- ogy, it empowers employers to redeploy their human resources to more complex, engaging tasks while accelerating the speed and efficiency with which things like data entry or extraction had been performed by people. Where Does RPA Help Mortgage Lenders? W e are seeing RPA starting to be employed through- out the mortgage processing phase of the transaction. Oftentimes, it is used to vastly improve interactions between phases of the process (application to data entry; underwriting). It is also being used by lenders using technologies that are not fully integrated or able to take advantage of open API (e.g. Where a POS is not able to smoothly transfer data into the LOS). In all these cases, RPA is being used to replace things like manual (human) data extraction or entry, as well as eliminating the error-prone "stare and compare" processes. So, in cases where loan processors were required to spend time and effort dragging a potential borrower's data into the LOS, including things like con- tacting the borrower for missing or corrected information, bots are starting to be used instead. In fact, it is fair to think of