Documents are an integral part of the loan origination process. Borrowers send in their applications and documents that contain information on their personal and financial details. Lenders then use these documents to verify the information and check if the applicant is fit to receive the loan.
That said, digitization has taken over every industry, including the UK mortgage lending market. Since the coronavirus pandemic, the usage of financial apps and services has increased by 72% across Europe.
This blog will discuss the need for automation and digitization in the mortgage loan origination system and how Digilytics approaches information extraction from documents with its product.
The mortgage origination process is not a one-step process. It begins with the borrower doing their spadework in finding a suitable loan and then applying for it. This step is then followed by the checks performed on the documents by the lender. Once all the checks are performed, and the verification is complete, the application moves into the funding stage.
The most crucial step in this process is document verification. The underwriter learns about the financial status of the applicant and determines their creditworthiness.
Document verification without the intervention of digitization would mean that underwriters would have to perform all checks manually. So let’s shed some more light on this step.
Apart from the application, supporting documents required from the borrower include ID proof, address proof, bank statements, payslips, tax returns, etc. The underwriter manually scrutinizes all these documents while verifying the information.
The lender has to manually enter all the data into the system and search through a large amount of data while extracting any information.
Throughout this process, a lot of back and forth occurs between the lender and the borrower. Due to manual data entry and data verification of the documents, the two parties usually communicate more than four times. The lengthy feedback loop also increases when the information provided by the applicant is incomplete.
These are only documents for one applicant. The underwriter has to perform the same checks continuously over countless documents for all the applications. Even if the lending company hires a team of underwriters, the document-underwriter ratio would be too high. The completion of the entire process with funding takes over 35 days on average.
It is no surprise that the manual loan origination process is:
These results show the need for a change in the UK mortgage lending market.
A digitized mortgage origination process can
One of the most commonly used digital methods for data extraction from documents is the OCR (Optical Character Recognition) method. The OCR tool can scan the text and convert it into an understandable format to the computer and readable to the user.
It is an excellent tool for automated data extraction as it eliminates the need for case handlers to enter all the data in the system manually. This reduces the number of human errors made and helps in completing the origination process a bit quicker.
However, the OCR method isn’t efficient with all input cases. Until the input documents are structured and follow a particular format, OCR works efficiently. But the moment the input document shifts to an unstructured version, OCR begins to fail.
Documents used in the loan origination process are sometimes unstructured. For example, they may include tables or images in them. In addition, some of the data fields in the application may even provide information that is hand-written by the applicant. In such circumstances, OCR becomes less accurate.
Digilytics™ RevEl is an #AI-enabled revenue elevation product for #mortgages.— Digilytics AI (@digilytics_ai) July 2, 2021
✔️ It delivers significant productivity improvement and efficiency benefits.
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Digilytics AI is a loan origination software company that uses Artificial Intelligence (AI), Machine Learning (ML), and other digital techniques to extract data from documents. RevEl, a Digilytics product, focuses on digitizing and automating the origination process.
With the help of One-shot learning (OSL) algorithms, Digilytics can accurately extract data from structured and unstructured documents.
Digilytics combines the power of computer vision, machine learning, and natural language processing to capitalize and enhance the data extracted from OCR techniques. It helps extract data with accuracy levels as high as 95%, irrespective of the document type.
The AI mortgage lending tool can then compare this extracted data with other documents to validate and verify the information, thereby delivering first-time-right applications.
As lenders are struggling to ingest and capture relevant data, we at Digilytics AI are driving innovation with one-shot learning and first-time-right application for lenders https://t.co/nYXo3cxNn8#ai #machinelearning #datascience #artificialintelligence #technology #analytics pic.twitter.com/TCvEz9wpCZ— Digilytics AI (@digilytics_ai) July 15, 2021
Data Extraction with Digilytics Oculyse
Digilytics Oculyse is part of the RevEl application whose objective is to process, manage, and generate insights from e-documents. Through its artificial intelligence dashboard, Digilytics can perform the following tasks,
You can also add annotations to any document with Digilytics. This annotated data can then be used for contextual data extraction.
Oculyse is an #AI extension to Electronic Document Management Systems (EDMs) that enhances the #mortgage business process by adding intelligence by providing access to AI-enabled #analytics and #automation capabilities. https://t.co/Ji6jbP7KDJ#artificialintelligence pic.twitter.com/D4NzywOnDg— Digilytics AI (@digilytics_ai) June 18, 2021
RevEl’s vision is one-touch underwriting and one-day manufacturing. With the help of intelligent data capture and one-shot learning, RevEl stays true to its vision.
You do not have to worry about training your AI model with mortgage-related documents to recognize and extract data. Digilytics RevEl’s AI model is trained with over 7 billion mortgage-specific tokens and over 100 mortgage documents.
By pre-training the AI and ML model, Digilytics delivers a highly-trained and accurate model for data extraction and validation, which helps the lender in saving time.
Using one-shot learning, RevEl can also perform the 3C check on the documents after extracting the data. The 3C assessment includes checking the completeness, correctness, and consistency of the information in the papers.
@digilytics_ai one-shot learning aims at first-time-right applications for #mortgage lenders. In this blog, we see how one-shot learning is different from horizontal #opticalcharacterrecognition capabilities?— Digilytics AI (@digilytics_ai) June 23, 2021
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As mentioned earlier, RevEl is trained with numerous mortgage-related documents that allow it to deliver higher accuracy levels in reading, extracting, classifying, and validating the data from the applications and documents. Higher accuracy also means a significant reduction in the errors caused by human intervention.2. Faster Delivery
Elimination of manual data extraction with the help of artificial intelligence and machine learning mortgage tools assists the underwriters and lenders in completing the mortgage requests at a quicker rate.3. Better Decisions
Due to highly accurate data extraction, lenders can use the information to analyze the borrower's creditworthiness and calculate the best mortgage plan for them. Apart from precise data extraction, RevEl also offers insights and analytics that further assists lenders in making more effective decisions.4. Reduced Operations Cost
Digilytics RevEl eliminates the need for loan origination platforms to hire a giant workforce for sitting and verifying every detail of information in the borrower’s application and documents. This helps in reducing operating costs.5. Enhanced Customer Experience
Digilytics RevEl eliminates the need for loan origination platforms to hire a giant workforce for sitting and verifying every detail of information in the borrower’s application and documents. This helps in reducing operating costs.
Extracting information from the documents is most important for verifying the information and approving loans. Any discrepancy in data extraction can cause problems for the lender as well as the borrower.
With the Digilytics AI approach to information extraction, you will never have to face any problem as it makes the entire loan origination process simple, streamlined, and efficient.
Digilytics is a fintech company that leverages the power of Artificial Intelligence to revolutionize and automate the UK mortgage lending industry. With Digilytics, lenders can produce more first-time-right applications and deliver mortgage funds quickly and efficiently.
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