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   ARTICLE   |   From Scotsman Guide Residential Edition   |   December 2018

Reboot Your Technology Woes

Mortgage companies are making big bets on technology, but aren’t always getting hoped-for results

Reboot Your Technology Woes

About the only thing that mortgage companies are investing in these unsettled times is new technology. If those new systems are working great, that’s fantastic. But what happens when what was promised isn’t what is delivered?

Don’t bang your head against that computer screen. There are things you and your company can and should do.

The mortgage industry has been in cost-cutting mode for over a year now. An unappetizing cocktail of declining origination volume and residual compliance costs have boardrooms everywhere scrutinizing new ways to ease pressure on profits.

To that end, the industry has seen a bit of a boom in the adoption of software to enable eMortgages as well as other digital systems to assist with compliance or vendor management. Lured by the prospect of cost savings and increased efficiencies, a number of lenders and originators have undertaken significant technology investments recently.

And yet, not all are pleased with the early returns. Some are finding that they bought a great technology that doesn’t really fit their own business models. Others are struggling to collaborate with old partners and service providers because of the new technology. More than a few are wondering when the promised return on investment begins.

It’s entirely possible that some originators jumped at a technology solution that simply didn’t fit their operations. Or perhaps that technology isn’t adapting as the market continues its rapid evoution. No matter what the cause, there’s still hope for those originators. For those still weighing their options, the following are a few suggestions to avoid the early bumps in the road.

Expectations missed

While this wave of technological adoption is still fairly new, it is becoming apparent that not every business making such an investment is completely satisfied in the early days. The challenges seem to fall into four categories:

  • Difficulty adopting the new technology;
  • Compatibility with third-party systems (that of vendors and/or service providers, for example); 
  • Functionality limitations; and 
  • Ongoing support.

Some of these concerns can simply be attributed to inertia and the traditional learning cycle. Sometimes, it’s just not simple to change the way one does business. But many of the challenges start with the company’s expectations and true understanding of how its processes really work. 

The best technology developers have experienced some of these challenges over and over again. In the case of difficulty making the transition or adapting to the new system, sometimes more training and a little patience is all it takes.

It’s important, however, that your management team makes clear that there is no going back to the old way of doing things. It’s critical that the people who will be using the technology every day understand that, like it or not, this is part of the job.

Lack of compatibility with third-party systems happens fairly often. Many times, it’s simply not a consideration when making the purchase. Most vendors are willing to implement any workarounds that they’re able to. Where that’s not possible, you may need to enlist the help of your technology provider or even a third-party consultant. If the workflow and communication between the originator and the service provider isn’t seamless, you aren’t really reaping the benefits of your new technology.

Sometimes, the challenge with functionality limitations and lack of ongoing support from the provider require some creativity. While these are issues best avoided via due diligence before the purchase of the technology, there are service providers and consultants that have likely seen your challenge elsewhere and can offer solutions.

This may involve supplemental technology or additional training for your staff. If you feel your team isn’t being supported adequately during implementation or thereafter, the first step is, of course, taking it up with the tech provider. If this proves fruitless, however, there are also numerous third-party companies that can provide training and support when the developer is unwilling or unable.

The result is that some may find themselves behind the proverbial eight ball. With the pressure to produce now offset by the reality that the expensive new tech investment is not yet delivering expected results, it can be tempting to consider starting over and absorbing the sunken cost. Do not yield to this temptation. There are solutions.

Workflow fit

For those still considering technological solutions, this is not a warning to step back. There are a number of fantastic technologies on the market that have made strong originators even stronger. Just remember that the vetting process begins not with the technology, but with your business goals and business model.

Even if your recent technology investment isn’t proving to be a perfect fit, chances are it’s going to be an improvement over what you were doing before. 

Occasionally, originators enter the technology-selection process with a number of product features in mind, only to later discover the hard way that those features don’t truly mesh with how the business actually runs or where it wants to go. Consider the following questions as you begin the strategic process (and yes, it’s absolutely a strategic process) of finding the right system for your operation.

Does the technology integrate with all touchpoints to the transaction, not just origination? Remember, the consumer attributes delays, mistakes or other obstacles during the underwriting, settlement and closing processes to you, the originator — even if you aren’t directly driving that process. The last thing you need is delays caused by a poor fit between your technology and your service providers’ technology.

Does the technology fit my culture and workflow? Having your loan officers, underwriters, vendor managers or other staff flitting from screen to screen to screen probably isn’t very efficient. Really scrutinize how your team works, and how they’d work with the new tech solution.

 Is there still too much data entry going on? Are your frontline personnel resorting to nonsanctioned programs just to work around perceived challenges in your new system? Is the team reverting to old methods in spite of your efforts? All of these are signs that, at the very least, more training is required. And there are things to consider before you make the investment.

Finally — and this takes some time to determine — is your new technology solution capable of adapting when, not if, the market changes? Ask your potential technology partner to show you how your shiny new investment can, and will, adapt and remain useful after the next game-changer comes along. This can be a great way to avoid having to essentially renew the investment within a matter of years.

Keep in mind that you are not alone in this endeavor. Good partners and service providers can help you by sharing what they’ve observed in the market. You’ll also want to be sure they’re on board with your new technology and willing to make the necessary steps to ensure the process remains smooth at all points of the transaction.

The best national providers should already have technology systems in place that easily integrate with other systems. Don’t be shy about talking with chief information officers or chief operating officers from vendors you trust. Chances are that they’ve seen some of the good — and bad — fits and can share some ways to avoid the pitfalls.

Possible fixes

The preceding advice is prescient if you haven’t, yet, made the investment in a new vendor-management system or eMortgage capable loan-origination system. But if you have, and you’re experiencing some of these hiccups, all is not lost. Nor should your first instinct be to declare failure and either revert to antiquated processes or start the search for yet another system.

Start by asking a few simple questions of your organization. Does the team simply need additional training? Are the previously installed supporting technologies the problem? Are they where the process comes off the tracks? Some-times, a smaller expense could help you avoid the painful expense of starting over.

Next, your organization should seek help. This doesn’t have to be in the form of an expensive third-party consultant, although it may become necessary later for the most complex issues. Start with the technology vendor. That vendor has every interest in making the system work for you. Enlist (or conscript) them for strategic solutions (not just workarounds).

But don’t stop there. Again, consider speaking with your national service providers. They, too, have every interest in seeing you succeed. And if they can’t be bothered, perhaps it’s time to consider a new service provider. A good partner should have systems and technology experts who are happy to share their experience and offer suggestions for ways to make the transition smoother.

Even if your recent technology investment isn’t proving to be a perfect fit, chances are it’s going to be an improvement over what you were doing before. Borrowers are beginning to demand an easier mortgage experience, and that begins with the intelligent use of good process and great technology.

So, as difficult as it may seem, try to stay patient when things don’t instantly click. Help is available, and it’s likely that you can benefit from hearing about what others have done in similar situations.


 


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