As technology has become a pivotal aspect in almost every industry, it’s safe to say that the technology bug has smitten even the housing industry. It’s because the online search has now turned into the most effective method of finding a home for prospective home buyers. The digital transformation has also impacted the mortgage industry as many lenders have quickly digitalized the process, from application to closing.
Even though the applicants may still require fax machines and scanners to furnish their financial documentation, the process has undergone an extensive transformation as digital capabilities such as online form submission and digitized documents are becoming a norm.
Check out some of the ways in which technology plays a vital role in reforming the mortgage industry and helping lenders and borrowers ensure safer and quicker lending.
Data-Driven Decision Making
The more detailed background you have of a prospective client seeking a loan, the more suitable a decision you can make. Thanks to AI and automated machine learning, lenders don’t need to manually sift through documents and histories to make well-informed choices regarding an application. This speeds up the lending process without introducing any unwanted inaccuracies or overlooking essential data elements.
A More Streamlined Road To Approvals And Subsequent Payouts
With internal process refinements comes a luxury for lenders: the ability to allocate workforce and resources more effectively. This potentially enables the capacity to better serve more customers in a more time-efficient manner without rushing, which translates to a generally smoother, shorter road to approval. If there are barriers to support, they should be flagged and addressed before moving forward. Mortgage advisor Glasgow like prestigemortgagesolutions.co.uk can help to know more.
Alternative Lending Solutions
Innovations like peer-to-peer lending have paved the way for continued lender process refinement, again reducing the delay between loan application, approval, and the provisioning of funds. With this example, the more traditional approach of accepting deposits before offering loans isn’t a necessity. In many cases, the turnaround time via alternative lending methods is typically much shorter – even within a day or two. When waiting for necessary funds is often not an option, this process improvement should be considered a top priority in the ever-competitive lending sphere.
Reduced Process Bloat
With that time saved, the ability to better allocate resources and manage overhead comes without sacrificing service efficiency but instead improving it. Moreover, by letting AI, machine learning, and automation manage all processes that can realistically be taken care of by software rather than manual labor, you’ll be lessening the load on the shoulders of hardworking team members. This makes it more feasible to switch employees onto more urgent projects, process improvements, strategy planning, and otherwise, while modern technology tackles much of the busy work.
More Cost-Effective Lending Operations
Of course, saving on overhead costs can significantly impact your finances and available resources as a lender. From everyday office expenses to long-planned cloud migration projects, security improvements, increased hiring, and worker training, there are many ways you can make use of having more cost-effective lending operations.
Not only that, but you can pass these savings onto your clients to make life better for them. For example, you might be able to cut back on the current interest rates, especially if there’s plenty of demand from prospects for loans and you can process their applications well-informedly.
Alternative routes include the development of mobile applications, software tools, and other companion solutions that make the lending experience more streamlined and informative for customers. This could even lead to more savings by doing away with outdated, clunky portals and replacing them with more secure, modern, and easy-to-navigate systems.
Improved Security And Compliance
A significant benefit of adopting modern technologies is that you’re better positioned to maintain current security standards. This is essential for a lender as they must remain fully compliant in many areas, including data privacy, cybersecurity, fraud detection, cloud governance, and otherwise. Systems like Blockchain are instrumental in these areas, with many solutions harnessing predictive analytics, AI, automated machine learning, and other elements to help lenders look after their customers and finances.
Not Being Stuck In The Past
The only way to improve the lending process is to be open to change. Many organizations struggle to do so by clinging to outdated, woefully inefficient legacy hardware and software. This, in effect, translates to having outdated internal processes, the burdens of which are then passed along to customers while slowing down your operations. Therefore, with the right strategy and careful, calculated refinements, a modernized lending process, including digitization and cloud integration, reduces this friction and many subsequent risks.
It usually takes around 50-60 days to complete the loan process from start to finish, out of which almost 18-20 days are consumed in obtaining an underwritten loan approval from the lender. In today’s fast-paced world, where groceries ordered from an online store get home-delivered within hours, the period of 60 days can seem too long, even if it’s a transaction as important as a mortgage loan.
Technology is being utilized to enable applicants to navigate a self-guided experience to address this issue and optimize the entire process. For borrowers with smartphones, real-time assistance from their designated loan officers is another feature driven by technology that is helping mortgage companies to deliver an improved experience. Moreover, by empowering the borrowers with self-service, even the mortgage firms can extract the benefits of investment as they no longer have to remove the exhaustive documentation from their clients, which happened to be a monotonous task.
There’s never been a better time to take your lending operations to the next level. Regardless of your organization’s size, process complexities, or client base, the rewards of doing so are well worth it. By keeping up with the latest proven innovations and integrating them where it makes sense, you’re positioning your capabilities to remain aligned with prospects’ needs and maintain your position as a viable competitor well worth the time and expense.