It’s hard to imagine any industry functioning without technology, but in the mortgage industry it is indivisible from firms’ products and business operations. IT and data drive every stage of the loan manufacturing process, including business-critical assessments of borrowers’ overall financial profiles that help to minimize risk in lending decisions.
This inextricable link between technology and business outcomes means the head of IT at many mortgage lenders has evolved into a role that is highly strategic to the business. That trend is set to continue as artificial intelligence (AI) unlocks new paths to efficiencies, cost savings, product innovation, and a better customer experience.
Tech investments that reduce costs are becoming a priority as lenders adapt to today’s economic environment, with falling demand for mortgages and rising costs. Product and Operations leaders need the technical expertise of IT professionals to assess the potential of AI to reduce expensive labor bills.
And this is where TRUE fits in. TRUE is the only AI system trained in the language and lifecycle of lending. It transforms lenders’ understanding of borrowers, turning their unstructured documents into lending intelligence, by enabling mortgage providers to fully automate expert yet laborious data processing tasks such as docs-to-data conversion and verification of new loan applications. Here are 4 ways that TRUE is making life better for IT professionals.
1. Technology is in the driving seat
Lenders are under constant pressure to make rapid yet smart lending decisions, but borrowers’ data is buried in hundreds of pages of documents. These need to be read, classified, and the relevant information extracted.
While document reading technology can play a role, most classification and extraction work needs to be performed by trained human agents. As a result, docs-to-data conversion and verification tasks remain stubbornly expensive and time-consuming.
TRUE’s AI makes it possible to fully automate these tasks – rapidly, accurately, and with no humans in the loop. This is a game-changer for lenders: removing the data bottleneck allows loan origination systems (LOSs) to reach their full potential. Rapid document processing and assured data correctness dramatically speeds up loan manufacturing and reduces risk in lending decisions.
With TRUE, lenders gain sustainable cost savings and an elastic business model that instantly adapts to changing demand. Skeptical about vendor hype, Product and Operations leaders are looking to their peers in IT to help them make the right tech choices. That gives IT professionals a critical role to play in enabling the business to integrate AI, make progress towards fully touchless automation, and create a future where data drives product innovation and an improved customer experience.
2. Simplifying software development
The demands on IT organizations are forever increasing as the role of technology in lending businesses expands. IT leaders need to balance the needs of the business with available resources, determining which systems should be run in-house and which should be outsourced or cloud-based.
Bringing AI and machine learning (ML) into this mix risks overburdening already stretched IT teams. These technologies require specialist skills and, arguably even more challenging, a huge amount of time to train the system before it becomes capable of adding value. These factors make building AI or ML tools from scratch a costly and risky undertaking. Working with partners is an option, but few AI providers are fully versed in lending industry data and practices.
TRUE is the only purpose-built, AI-powered lending intelligence system on the lending market. The platform is trained with data that is used throughout the mortgage industry, allowing it to deliver proven accuracy rates of 95% out-of-the-box. From this high starting point, TRUE works closely with IT and Operations to tune the solution the needs of the business. Within just a few months, accuracy rates exceed 99%.
Consistent performance at such high levels is essential for convincing management that there is a permanently reduced need for human agents. As automation increases, radical gains in document processing speeds and efficiencies soon translate into sustainable cost reductions.
3. Use data science to innovate
A seat at the top table gives IT leaders a role in developing business strategy. Analysis of borrowers’ data can reveal opportunities for product differentiation, ways to improve the customer experience, and for building a more competitive business model.
A key limiting factor has been the high cost of data acquisition due to highly manual document classification and extraction processes. AI-powered automation removes these limits, significantly expanding the range and accuracy of borrowers’ data.
Trapeze by TRUE allows lenders to build a truly holistic view of their customers – the data are far more extensive than what is normally captured by human agents. This is a powerful resource for data science, offering immense potential to improve business strategy and outcomes.
TRUE generates lending intelligence and the underlying data that enables forward-thinking players to get ahead of the curve. As has been seen in so many industries, mastery of data determines growth and sustainability of the business. Only the very biggest lenders have access to data science teams, so IT leaders need to grasp the opportunity and educate management about the potential of data science in lending.
TRUE’s customers will discover they’ve gained a collaborative partner, ready and able to help them innovate using data science.
4. Data Security
A major data breach can sink a business – financially and reputationally. While any responsible lender will ensure compliance with data security regulations, many IT leaders aim to keep their business at the leading edge of best practices to avoid the disruption and existential threat of data being compromised.
Protecting data first requires that you know where it is. Data warehousing and cloud computing means even the most sensitive customer and financial information is entrusted to third parties. A potential weak link arises when data is transferred to outsourced service providers.
It is common practice for lenders to use third party human agents to add capacity and reduce costs in loan manufacturing. However, this takes borrowers’ data outside of a lender’s trusted network, puts it onto a partner’s network, and unavoidably shares it among people who are not direct employees. It can be difficult to truly know how much care is being taken, while different jurisdictions may have weaker data protection laws.
TRUE operates entirely with a lender’s network, avoiding human outsourcing risk. IT professionals at lenders that use other data analytics providers should double check that they meet this high standard. Some share data in limited cases, such for as tech support. IT professionals need to ask if they really know where their data is at all times.
With TRUE integrated into IT systems and lending processes, IT leaders in the mortgage industry can work with management colleagues to build a business that delivers better outcomes at a lower cost. Taking the opportunity to invest in proven AI while volumes are lower gives time for change to take place and the transition to bed in. TRUE helps lenders scale up once volumes return, while equipping IT professionals with the resources to fulfil their strategic purpose.