Residential Magazine

The Power of Digital Transformation

Robotic process automation can reduce costs and improve service

By Russ Gould

Digital transformation can mean different things to different people, particularly in the diverse financial-services realm. Loan-processing centers may focus on eliminating paper while retail mortgage companies might be more concerned with developing omni-channel strategies featuring strong mobile presences.

Whatever the path, creating a digital future starts with defining desired results and establishing clear business goals. For mortgage originators, and the companies they work for, this might include improving customer experiences, increasing revenues, reducing costs, or mitigating risk. In addition, a strategic digital vision must consider both front- and back-office operations, so it is important for originators to be involved in setting this vision.

Mortgage origination and processing fall squarely in the middle of the opportunities — greater productivity and increased efficiency — promised by digital transformation. The key component to the digital-transformation strategies that will propel the mortgage industry into the future is called robotic process automation, or RPA.

Because digital transformation is happening in what some call the age of engagement, it is driven by improvements in operational processes, mobile access to products, and services and personalized customer experiences. This is where RPA fits in, by helping companies meet customer expectations and resolve manual processing issues.

Defining RPA

As a key component of digital transformation, RPA dramatically changes how customers, employees, partners and others work together across critical business processes. By mimicking the repetitive tasks handled by employees — collecting and integrating data among external websites, portals or various desktop applications, for instance ­— RPA creates a digital workforce. This eliminates the manual aspect of repetitive tasks, amplifying productivity and avoiding costly errors.

RPA’s smart software robots enhance the customer experience by improving processes. They can, for example, automate the entry or retrieval of information from any system. This includes application of sophisticated business logic to transform data, handle exceptions and make faster decisions for competitive advantage. Employees benefit as well, and are typically happier focusing on the most productive aspects of their jobs instead of repetitive, data-gathering activities.

Ideally, the entire process is digitized, from borrower engagement and employee onboarding — either online or via mobile apps — all the way to back-office processes such as loan approval, underwriting and loan closing. When digital strategies focus solely on the front-office customer experience, however, they miss opportunities to enhance the customer journey, reduce costs, keep the competition at bay and maintain compliance — all of which can impact originators’ relationships with their borrowers.

Realizing opportunities

In a mortgage setting, RPA facilitates a head-on approach for meeting loan quality, compliance and cost concerns. Any task where a human interacts with an application or data source can instead be handled by a software robot. As these repetitive and time-consuming manual tasks become automated, loan originators and processors can focus on more important tasks and details. Data is more accurate, reporting metrics can be tracked better, and operational costs and loan timelines can be reduced by automation.

When software robots are deployed to quickly and efficiently handle mortgage lending tasks throughout the process, processing speed is improved. Monitoring e-mails, pulling in data and documents from various internal systems, and reconciling data between enterprise content-management and loan-origination systems are all examples of tasks that can be handled by robots, freeing up staff for more strategic activities. With automatic collection and cleansing of loan data, loan applications are approved quickly and generate revenue faster, while originators can focus on building business relationships.

Accelerating the collection of required data in turn speeds loan approvals, and enhances customer engagement and satisfaction. A leading European bank, for example, automated the extraction of loan-application data from a third-party portal and connected the information into its internal system and processes. The organization was able to quickly and efficiently present offers to borrowers, reducing response time from 14 days to just minutes.

Gathering and verifying documentation and entering information into various systems are all manual tasks that can instead be handled via RPA, which can reduce operational costs while increasing efficiencies. One leading bank achieved 100 percent automation, eliminating manual errors as well as the additional work necessary to correct mistakes. When automation is introduced into the mortgage origination process, manual tasks and costs also can be reduced in the post-closing process.

RPA also can decrease risk and improve compliance. Normally, employees would verify the integrity of a loan file, but this critical action can now be performed by RPA. Software robots can automatically package digital loan files as part of the quality-control and audit-review process. Audit processes themselves are further streamlined by ensuring all of the correct documentation is in order.

Seeing RPA in action

RPA is already proving its value by improving mortgage lending services, strengthening risk and compliance management, and enhancing customer service. Return on investment is fast — sometimes within as little as six months or less. Modern banks and mortgage companies built for the future are counting on the speed, accuracy and efficiency afforded by RPA to create a competitive advantage that capitalizes on productivity gains, cost reduction and an improved customer experience.

The deployment of RPA at one bank, for example demonstrates this new digital value, documenting a dramatic improvement in loan-processing timelines and overall efficiencies. The institution offers a broad array of financial services to individuals and businesses — from small companies to major corporations — and has leveraged RPA to significantly improve loan processes.

The challenges this bank faced included increased demand for lending services and delays in their operations, with loan documents taking up to 15 days to convert into electronic files. In addition, manual work flows and delays often resulted in lost sales, slower time to revenue and a negative impact on cash flow.

After implementing RPA systems, this bank reduced turnaround time for digitizing loan documents from 15 days to five. The bank migrated 800,000 documents to an enterprise content-management system in a matter of days, instead of months.

In addition, the bank deployed a software robot to automatically gather all relevant loan documents, combine them into PDFs and send notifications that the files were ready for audit review. Automated, post-closing processes further streamlined auditing of loan files.

Transforming with RPA

Although financial institutions are moving to digitally transform their operations, many are still plagued by manual processes and tasks. RPA can be an ideal starting point, well-suited to optimizing mortgage processes and driving automation in both the front and back offices.

It may sound counterintuitive, but focusing solely on the front-office customer experience actually neglects opportunities to provide an excellent borrower experience. To create personalized customer touch-points that distinguish a financial organization from its competition, latency in back-office processing must be addressed as well. Attention to this area helps reduce time and cost in the overall journey, while maintaining compliance with regulations and internal policies.

To achieve these kinds of digital advantages, consider a digital vision centered around the goal of meeting customer expectations, such as streamlining processes in high-priority customer journeys. Be sure to focus on the entire process, mapping the complete customer experience, from beginning to end. Aim to meet borrower engagement goals while keeping originators, partners and processing personnel informed and in sync, all while adhering to auditability and compliance requirements.

• • •

The financial crisis of 2008, combined with increasing regulations and manual efforts to ensure investor and regulatory compliance, have caused mortgage origination costs in the U.S. to sky-rocket over the past 10 years. It’s time to get this right. Be prepared to evolve “normal practices” based on a digital vision. Adopting new technologies such as RPA can help provide beginning-to-end support for a new and better kind of customer journey.


  • Russ Gould

    Russ Gould is vice president of product and solutions marketing for Kofax. Gould’s enterprise software expertise spans content, process, compliance and document-capture disciplines. He is a published author with more than two decades of technology product marketing and consulting experience.

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