Growing Influence of AI & Automation in Mortgage Processes and Lending

Today’s leading financial institutions in the United States are investing millions into updating their capabilities through the use of artificial intelligence (AI). Automation affects almost every industry today in one way or another. More specifically, the mortgage industry continues to see change in regulations and compliance, increasing the need for stronger processes in internal and external systems.

Many of today’s mortgage firms are realizing that they have missed the mark in their processes and internal systems, specifically as artificial intelligence capabilities increase. In most of these organizations, there are many disparate management systems that are used internally throughout the lending process to simplify and organize documents and records. There may be a system used by the accounting department to manage finances and transactions, another system used by the marketing department to increase lead generation, and another LOS (Loan Origination System) used for processing documents.

Many organizations face difficulties in streamlining these processes, blending all facets together as one unit. The accounting system, the marketing system, and the LOS system are all independently run, with no connection to each other. Each system in itself works to be customer-centric to provide a more positive customer experience before and after a transaction is completed. However, processing systems would actually be more customer-centric if they were interwoven.

For example, the accounting system runs independently from the LOS system, and both may store their data in a singular data warehouse that ties all functions together. Yet, these systems are tied together only at a data level, not at an operational level. Because they are tied at a data level, it’s nearly impossible to find status on documents and mortgages in real-time. If the systems were tied at an operational level, anyone in any department could pull a real-time status update for a customer, allowing for quicker decisions and better customer service.

The development of artificial intelligence tools is enabling new systems to be completely process oriented. All functions can be tied together creating a transformative system that can be utilized for years to come. While some organizations maybe taking full advantage of advanced AI technology integration, others are simply upgrading the technology they currently use. Essentially, allowing for very little organizational change and “doing what one’s always done” just in a faster way. Mortgage companies that excel in their processes understand that small upgrades simply do not provide the same level or organizational transformation that a complete process management system enables.

Not only does the integration of a process management system improve internal efficiencies for mortgage lenders, but AI digitalization offers lenders an opportunity to engage with their customers on a more personalized level, encouraging stronger customer relationships by using AI to enhance their experience. For example, some process systems will allow for lender customers to log in and view actionable items themselves, rather than requiring a customer to call or email their lender. The same system can allow for customers to upload documents and necessary items directly through a portal, which can be placed directly into the process management system rather than requiring the customer to scan and email documents, and then requiring internal personnel to upload them. Not only does this better serve the customer, but quickens the process internally for lenders.

Furthermore, the standardization of processes helps mortgage lenders to stay in compliance with ongoing regulations. With updated AI systems, legal documents can be more easily found and organized. By improving the way documents are held in a secure environment, there leaves little room for error. This is especially true with systems that have the capability to flag the lender when they are missing legal necessities in a document, such as a signature.

In conclusion, standardization of processes utilizing AI can help mortgage lenders to provide better customer service, increase efficiency, and save money over time. Rather than making simple and costly upgrades to separate existing systems, using a business process management system with integrated artificial intelligence that connects all systems into one will significantly improve operations for mortgage lenders.

Author: Vladimir Kovacevic, CTO Managing Partner