Margin compression and how to deliver new products that are increasingly complex, in an efficient way. Those are two key points made at a recent virtual event hosted by HousingWire and sponsored by us, Parascript. We also found that the pandemic did a lot to highlight the process issues associated with lending including the increased need to access documents from somewhere else than a branch or central office and the increased need to integrate disparate systems to enable seamless access to document-based data, inabilities of which contribute to shrinking margins.
On the margin compression front, “Automation. Automation. Automation!” seems to be the mantra for forward-thinking lenders as expressed by guest speaker Kathryn Amor, Chief Product Officer at Finance of America. One of the issues Steve Rosso of TSP Consulting pointed out that limits the ability to automate is the lack of a consolidated data warehouse that would provide seamless access across applications and processes. Melissa Powell, also with TSP Consulting, added that integration is a key pain point fundamental to true automation.
A highlight of the session was when the topic turned to the reliance upon documents within processes, which Kathryn related to a “binky” that provides comfort to the industry, to which Steve responded that the solution should be to shred the binky. We all want to get rid of the arduous document-based tasks and it appears that the lending world is rife with them. Melissa added that regulations are a major impediment as they require the use and preservation of documents, mostly to provide an end-to-end chain of custody and compliance. So without changes at the federal level, documents will always be a part of the process.
The session concluded with an energetic discussion on the practical ways for lenders to go about thinking and adopting automation, from a technological, people, and process perspective. The upshot is that while a lot has been done from a customer experience perspective when it comes to “digital transformation”, when it comes to the back-office processes associated with lending, it seems to be a case of a duck appearing to glide effortlessly across a lack, all the while, furiously paddling beneath the water.
The answer: Automate document-based information and shred the binky!