Why Mortgage Process Automation?
Mortgage comes with a plethora of benefits that include:
Improved Loan Quality
The conventional mortgage lending process involves people who are susceptible to errors. Bank employees or loan officers deal with stacks of documents, endless face-to-face meetings, thousands of texts and emails, phone calls, and more. All these documents contain sensitive financial information of clients who must be referenced and tracked. Engaging in all this takes significant time and effort, and if something goes amiss, the whole process could come to a halt. Mortgage automation boosts loan quality by leaving little or no room for human error.
Minimized Cycle Time
The mortgage application process is not easy. It involves many steps that must be followed for success to be achieved. With mortgage process automation, repetitive tasks can be automated, and this streamlines the workflow and allows high levels of speed and accuracy.
Using artificial intelligence technology, such as indexing and digitizing documents with OCR (Optical Character Recognition), algorithms that assess customer risk levels and make credit decisions, and analytics for easy accessibility could significantly minimize the time and labor required for every application.
Reduced Costs
Problems that arise in the mortgage lending process due to human error are often costly. A recent study shows that banks and other financial institutions with less than $1 billion in assets reported ten or more incidents involving missing client documentation every month. This study projected that the cost from processing errors and compliance range from $100,000-$1 million. By reducing manual labor and the overall processing time, Mortgage process automation could help such institutions save huge bucks in the long run.
Increased Productivity
Employees can only work for a specific amount of time every day. Machines, on the other side, can work all day and all night without getting fatigued. Mortgage process automation gives organizations and their employees ample time to focus on things that cannot be done by machines while the machines take care of the rest. It also leads to the creation of a digital workforce, which ultimately increases service levels, employee productivity, and capacity by 35-50%, according to research.
Superior Fraud Detection
Mortgage fraud is a big problem around the world. A recent report shows that in the US alone, one out of every 123 mortgage applications had identification of fraud in 2019. Some of the most common fraud scams include falsification of income or assets and identity theft. The Federal Bureau of Investigations estimates that fraud costs the mortgage industry over $1 billion annually.
Systems involved in mortgage process automation come with cutting-edge solutions that can accurately detect and flag irregularities. This allows lenders to catch discrepancies early during the loan application process and flag those showing an increased risk of fraud.
Enhanced Customer Experience
Today, nobody wants to wait for ten weeks for a loan to be approved. Mortgage process automation means efficient and faster mortgage processing, which leads to happy and satisfied customers. A mortgage is one of the biggest financial decisions one will make in life; hence they expect a personalized, speedy, and convenient experience. This is what automation seeks to deliver. It allows lenders to better connect with their clients. With automation, employees are no longer tied down by repetitive tasks, and they can use their time to focus on customer service.
Final Thoughts
A majority of industries have reaped huge benefits from workflow automation. Even though the mortgage industry has been slow to adopt automation systems, modern-day lenders understand the need to incorporate digital mortgage technology in their processes so that they can remain efficient and highly competitive while staying compliant with regulatory demands and providing unmatched customer service. Apart from the benefits outlined above, mortgage process automation can greatly reduce labor costs and eliminate the need for manual processing. Therefore, its high time banks and other financial systems harnessed the use of technology to skyrocket business growth and make lending easier for their clients.
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