Mortgage advisory firm provides mortgage industry Robotic Process Automation (RPA) adoption data and outlines steps for its successful implementation
OCTOBER 1, 2019 – GREENWOOD VILLAGE, CO – As the competition for the mortgage borrower’s business continues, a growing number of lenders are turning to Robotic Process Automation (RPA) to re-engineer the loan process in order to increase efficiency and reduce costs. According to the September Insights Report from mortgage advisory firm STRATMOR Group, 20 percent of lenders responding to the 2019 Technology Insight Study Loan Origination Survey have implemented RPA, primarily for processing tasks.
“The data clearly indicates that RPA has landed solidly in the mortgage business, particularly with the most forward-thinking lenders,” says STRATMOR Senior Partner Michael Grad. “Eighty percent of the lenders in the survey reported investing under $100,000 in RPA, and 50 percent said they saw a positive ROI (return on investment) for their efforts.”
One STRATMOR Credit Union client used RPA to replicate document and data retrieval while using Optical Character Recognitions (OCR) capabilities to capture key data fields required for analysis. For the specific program, there was a 40 percent reduction in the estimated resources that would have been needed if the tasks had been done manually. The cost savings: An estimated $1.1 million.
“RPA is more than the latest technology trend, says Grad. “RPA is helping lenders re-engineer processes and transform the customer experience.”
The benefits to implementing RPA in the financial services industry include increased productivity, a stronger competitive market position, higher customer satisfaction, better quality and increased employee satisfaction. Lenders can expect higher revenue generation, reduced costs, fewer errors and improved compliance. Grad says the financial investment and deployment costs of an RPA effort are less than a typical programming project and that ROI is realized in less than three months. “Once you understand the process and the detailed processing steps you are working within, it all comes down to dotting the I’s and crossing the t’s within an RPA programming environment.”
One of the biggest challenges lenders face with deploying RPA is determining where to begin. Grad suggests lenders start RPA by selecting internal (not customer-facing), highly-repetitive, core mortgage tasks that can be automated quickly to show the value of RPA in improving the process. He stresses it is essential for lenders to help employees see that RPA not only saves the company money, but also can improve overall employee job satisfaction by allowing employees to be assigned more meaningful work (versus replaces these valuable resources with bots). As RPA comes in, Grad suggests lenders offer staff training opportunities in analytics, customer service and RPA support.
“Like other technology used with digital mortgage solutions, RPA is just one of many technology components with a role to play,” says Grad. “Lenders need to deliver a balanced platform alongside a clear, benefits-laden message to employees explaining that RPA is positive step in the evolution of the mortgage process that will not take jobs but provides opportunities to learn new skills.”
In a second article in the report, MortgageSAT Director Mike Seminari draws on data from the MortgageSAT Borrower Satisfaction Program to analyze the best ways to communicate with a borrower, particularly first-time homebuyers, to provide the optimal customer experience. For example, the data shows that if the closing starts late, or there is an error on the closing documents or an unexpected fee, the originator’s physical presence at the closing can be the deciding factor whether the borrower leaves a Promoter (9-10) or a Detractor (1-6) on the Net Promoter Score (NPS) scale. Just 38 percent of originators have attended their first-time homebuyer closings in 2019 YTD, an 18 NPS-point loss.
Click here to download the September 2019 edition of STRATMOR Insights Report.
About STRATMOR Group
STRATMOR Group is a leading mortgage industry advisory firm that provides a range of programs and services designed to counsel lender CEOs and senior executives. STRATMOR serves more than 250 companies annually, providing strategies that increase growth and improve profitability in sales, marketing, technology, operations and mergers and acquisitions. The company leverages comprehensive, propriety data and key insights gained through extensive experience in the mortgage industry. STRATMOR is well known for its financial models and its collaboration with the Mortgage Bankers Association in the PGR: MBA and STRATMOR Peer Group Roundtables Program. Find out more about STRATMOR on its website at http://www.stratmorgroup.com.