Operations professionals in the lending and mortgage industry face a constant tension between speed and risk. Processing loan applications or reviewing portfolios rapidly, while ensuring accuracy and compliance, is an endless challenge.
The first stage of the loan manufacturing process – constructing a picture of the borrower – is often the most demanding. The information needed to build loans is buried in hundreds of pages of documents. Extracting the necessary data is highly manual, and often an error-prone task. It’s laborious and costly, but data quality is critical in making sound lending decisions.
Past attempts to mitigate the data problem have not delivered sufficient gains or savings. Automated document processing technologies have lacked accuracy. Outsourcing entails high people costs.
Today, outsourcing costs are higher than ever, even in offshore locations. However, technology has advanced considerably. Solutions that use artificial intelligence (AI) can now fully automate docs-to-data conversion and verification tasks.
With AI taking on laborious work, operations professionals can operate with true lending intelligence – improving both loan quality and the customer experience. Here are 5 ways that TRUE – the only AI system that is trained in the language and lifecycle of lending – makes life better for operations professionals.
1. Build an elastic business model
The mortgage industry is experiencing reduced volumes as interest rates rise and house buyers grow cautious. Adapting to change is just part of the job for operations professionals, but that doesn’t mean it’s easy.
Falling volumes and the need to reduce operating costs mean that many lenders have no option but to reduce headcount. This inevitably sets up the next challenge: rehiring when volumes rebound. While volumes are low, operations leaders have a window of opportunity to improve how their business scales to fluctuating demand.
Enter TRUE, with AI that breaks the link between loan demand and workforce staffing. Unlike earlier document processing technologies, the TRUE platform and solutions are built for lending and are proven to be 99-percent accurate. They allows lenders to scale up and down without hiring or firing – resulting in lower, more predictable costs. TRUE helps lenders build a more elastic business model – one that can adapt to changing volumes rapidly, with minimal disruption, and with permanently reduced loan manufacturing costs. Moreover, accuracy gains translate into lower risk, better lending decisions, and less stress for busy operations professionals!
2. Turn mountains into molehills
What is the business impact of integrating AI into loan origination? Operations professionals know that docs-to-data conversion is a bottleneck. When applications spike, lending officers are swamped with W2s, bank statements, and other income documents.
Mortgage demand has been on a wild ride in recent years. The pace and scale of change increases the tension between loan manufacturing speed and quality. However, AI can automate the docs-to-data task in its entirety.
Trapeze by TRUE was made for this challenge. What used to be hours of work per loan is performed by the AI in minutes. Since Trapeze runs 24/7 without breaks, what was once mountains of work is reduced to molehills.
According to a recent report from Accenture, the average underwriter spends 70 percent of their time on non-underwriting activities such as admin and sales support. Inefficient, manual processes are largely to blame.
While underwriters will always need to devote some of their time to other functions, switching to Trapeze to capture data about borrowers ensures that operations teams can maintain a focus on underwriting quality even as demand for loans scales up or down.
Converting docs-to-data speedily and accurately, but without humans in the loop, changes the game for the underwriting process. The elimination of manual processes not only saves time and money, it also frees underwriters to focus on quality. With the value of underwriting back in the forefront, the role becomes more rewarding and more effective. Profit margins will rise even as risk falls.
4. Holistic understanding and hidden insights
When lending officers process documents manually, they only have time to consider the data that are critical to underwriting. Getting loans through the pipeline quickly and accurately means that a significant amount of valuable information about borrowers is routinely overlooked.
Using Trapeze for docs-to-data conversion allows richer data about every borrower to be captured without any increase in time or expense. The AI scans every field of every document in each application, building holistic borrower profiles that are the cornerstone of lending intelligence.
That intelligence has immediate and longer-term benefits. Holistic understanding of borrowers roots out errors and fraud, increasing confidence for every lending decision. The additional data is also a treasure trove for data scientists.
TRUE data creates new opportunities to identify trends, reduce risk, boost revenues, and surface hidden fraud. Lenders can optimize processes, enhance business outcomes, and find innovative ways to be competitive in a tough market.
TRUE is not the first technology promising to automate docs-to-data conversion and verification tasks, but it is the only one that keeps its promises. Operations professionals have been underwhelmed by the tools that are packaged with loan automation platforms. Even AI-based solutions struggle to make an impact if they are not trained on documents and processes used in lending and mortgages.
TRUE offers the only AI solutions – Trapeze and VerifAI – capable of full automation and proven 99-percent accuracy. Trapeze works throughout loan origination, ensuring the quality of the docs-to-data conversion at the outset and checking for any anomalies in the data before manufacturing moves to the next stage. VerifAI is used by loan servicing businesses, allowing them to examine the quality of entire portfolios – not just limited samples – in hours rather than days.
Trapeze and VerifAI give operations professionals peace of mind that completed tasks will not have to be revisited. They also improve confidence in calculations of risk, profitability, and business value.
Add it all up, and TRUE has the power to make life better for operations professionals across the lending industry: loan origination, insurance, and servicing. With Trapeze and VerifAI, costs fall and quality improves reliably and sustainably. As lenders – and mortgage companies in particular – are squeezed by the changing economy, it’s the right time to invest in technology that increases performance today and introduces efficient elasticity for the long-term.