MReport March 2017

TheMReport — News and strategies for the evolving mortgage marketplace.

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24 | TH E M R EP O RT FEATURE demographics seem to respond well to the latest campaigns? Marketing managers' data may answer these questions one way, but statistical regressions coming from the compliance department might shed different light. Ongoing dialogue should be main - tained between the compliance and market- ing departments to determine the best fit for the types of data available. • • Operations:•Here, fair lending data can also combine with core banking data to put a finer point on operations manage- ment. How are loan officers performing, such as in terms of data errors, sales, or adhering to policies? Which loans have the highest data quality, and where are mistakes being repeated? Annual perfor - mance reviews (branch, department, or individual) can involve compliance data for monitoring origination statistics, time to close, data quality, and disclosure com - pliance. On an ongoing basis, root causes of lending issues can be pinpointed and backed up by statistical analysis. • • Competitive•analysis•and•performance• context:•Publicly available compliance data drills right down to the street level of geographic coverage, providing peer and demographic data that is automati - cally updated in SaaS compliance tools. Periodic peer benchmarking and perfor- mance monitoring can be done at more granular levels using this data. Where are the competition lending, and what op- portunities might this present? How does your company compare? • • Customer•service: Automation instituted as part of compliance monitoring can lead to shorter loan cycles and fewer loan er- rors, improving the customer experience and reducing the potential for harmful consumer complaints. • • Brand•management: Beyond customer satisfaction, still more returns on brand management can be gained from efficient and compliant lending. For example, estab - lishing a strong record of compliance dem- onstrates how a financial services company looks out for its customers. These practices can even be statistically documented and contrasted to peer institutions. • • Mergers•and•acquisitions•(M&A)•and•branch• location: Public peer data provides a rich source of information to be mined dur- ing M&A due diligence. As for branch management, where a top consideration is "location, location, location," public geographic data can help map opportuni - ties and risks. Compliance personnel can easily inform business development with hypothetical views on how aggregate lending patterns might change in the context of different mergers, acquisitions, or expansions. • • Third-party•management:•Which of your lending partners, such as brokers, are performing better than others? Third-party management is a flashpoint for compliance today, and outliers should be identified as an urgent priority. Compliance tools can also identify business issues and opportunities with these partners. • • Cost•reduction: Industry benchmarks esti- mate that it can cost upwards of $6,000 to originate a mortgage loan. Leveraging the technology and personnel involved in the many compliance components of this pro - cess can deliver business intelligence and operational insights that help defray costs and protect unit margins while giving the borrower a better, faster experience. The Proviso N aturally, compliance data should not be used in any way that introduces bias into a business. The good news is that compliance officers know full well where the lines are and that compliance is their highest priority. The Takeaway T ake the first step. Set up a routine ses- sion in which one department—market- ing, for example—can interface regularly with the compliance department to discuss any trends they see in lending data. Once you've established a rhythm, go on to the next de - partment. Ultimately, all data is valuable data. If compliance data has value for business intelligence and operational insights—or vice versa—that point needs to be made across the enterprise to derive a better understanding of how the business is run and where opportu - nities for competitive advantage exist. LUKE WIMER•is•COO•of•Treliant• Solutions,•a•provider•of•RegTech• software•that•reinvents•compliance•as•a• source•of•competitive•advantage•for• financial•services•firms.•He•has•decades•of•experience• in•leading•strategy•and•operations•at•financial• services•companies. ROB TEDESCO is•VP•of•Product• Strategy•at•Treliant•Solutions.•Named• as•an•inventor•on•more•than•300• pending•and•issued•U.S.•patents,•he• has•spent•his•career•developing•and•commercializing• new•technologies•in•various•industries,•including• financial•services,•e-commerce,•health•care,•and• education.

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