Role of AI in mortgages

“Let’s go invent tomorrow rather than worrying about what happened yesterday” Steve Jobs the founder of Apple once said. This is how many organizations will be feeling when they eventually come out of the pandemic.

What will the world look like after COVID Era? There are numerous possible futures, all dependent on how governments and society respond to coronavirus and its economic outcome.

But for the Mortgage Industry, the crisis is an attempt to evolve and improve. The outbreak of the pandemic is turning out to be a great teacher for the mortgage market. Experts say the rise of “Intelligent Digital” is the new normal.

What is Intelligent Digital?

Intelligent Digital is the ability to align business understanding with technological innovation and human insight to solve important business problems. An intelligent digital platform leverages real-time connectivity, cloud computing, and advanced analytics to create a connected ecosystem.

Intelligent digital has scalable layers and it applies relevant algorithms to the available data to evaluate and offer accurate digital experiences to the end-users. An example of it is Google Duplex which is an AI-powered tool capable of conducting natural conversations to carry out real-world tasks on the phone.

Top 3 reasons why the mortgage industry should adopt intelligent digital sooner than later

In today’s increasingly digital world, bank lenders know that the only way to succeed is by being the lowest-cost producer on mortgage loans while offering exceptional customer experience. As a result, many financial institutions are already implementing a digital mortgage strategy, starting with a digital front-end. While it is a smart move, it is still not enough to entice customers and raise margins.

Banks need to consider the entire ecosystem and incorporate back-office digital capabilities with customer-facing functionalities to drive efficiency – And all that starts with intelligent digital.

1. Clear the paper clutter

While several mortgage providers are drifting to loan origination software solutions that completely automate the mortgage process, they are doing so mainly to gain efficiencies and reduce operating costs, as well as to improve borrower satisfaction.

Although these are invaluable reasons, many servicers continue to overlook the environmental benefits of going paperless. Research indicates that the paper cycle generates significant greenhouse gases. Thus, the reduction in the usage of paper helps in improving the ESG (Environmental, Social and Governance) index.

2. Cater to the changing customer behaviour

Customers behaviours and buying habits are evolving—and many of these new ways will remain post-pandemic. To manage isolation with social distancing norms in play, consumers are embracing digital than ever before - to connect, learn, buy, and play. These new behaviours will transform the mortgage industry’s future.

With rapid digitization and automation, lenders in the mortgage industry will become very demanding. They will need everything quickly and with a seamless experience. Quick time to offer, increased use of digital and social media will come into the picture. Customer preferences will evolve after the post-pandemic crisis.

3. Operational efficiency is a key differentiator

Leaner operations and quick time to offer are ubiquitous to maintain an efficient mortgage operation. Intelligent Digitization upholds massive potential to save time on repeated, redundant, and mundane manual tasks clubbed with a system smart automated system for easy decision-based cases.

With automated machine learning-based document classification, most of the non-value-added tasks reduce significantly - such as physical transfer of files, piling up of files/cases thereby saving printing costs, loss or misplacement of the file and handwritten notes.

Improves collaboration amongst teams, enabling new ways of working.

Each team can have a defined set of activities for each persona stage, avoid duplication of efforts across each stage, with clear-cut control and audit for user accountability - Data entry/validation with a streamlined process and task allocation, in a virtual setup. BCG Report says there will be “Rise of the AI-Powered Company in the Postcrisis World”. AI-enabled platforms will help companies better simulate live work environments.

Conclusion

While technological advancements were well on its way much before the pandemic outbreak struck, mortgage industry are now more interested to explore predictive tools using Artificial Intelligence and Machine Learning to deal with the new challenges arising out of the pandemic situation. As the COVID-19 pandemic continues to unfold across the globe, we may witness even more far-reaching changes in the mortgage market.

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