Ask a Mortgage Process Automation Expert – Part 3

MaryBeth Folger News

Ask a Mortgage Process Automation Expert

Welcome back to Part 3 of our series “Ask a Mortgage Process Automation Expert”. Catch up on Part 1 and Part 2.

Origination costs have been on the rise over the last few years. According to the Mortgage Bankers Association, the combination of increasing regulations and manual efforts to ensure compliance has resulted in U.S. mortgage origination costs that are three times higher than they were a decade ago. RPA can dramatically reduce the need for human intervention in loan processing so that employees can focus more on thought work or interfacing with customers.

Joining us today are Nolan Johnson and Ash Omar to share with us what lenders need to know about RPA.

What are some common observations you see with lender automation initiatives?

Ash: There are a handful of questions I receive so frequently that I like to try and address them before clients or prospects think to ask. The most common question I hear is which tasks should be automated by robots vs. worked manually by employees. It’s a great question because there are certain processes where it makes more sense for a human to handle it. So, this is one of the most important things to nail down before you start automating. An internal team dedicated to guiding the RPA program, known as the Center of Excellence, should be intimately involved in deciding what the business wants to get out of RPA and which processes will be automated. The COE also determines what to do if a robot skips or fails. Without this internal alignment, there’s a chance that an employee could work on a loan intended for a robot, or worse, that a loan would get skipped altogether, which could be disastrous for the lender. The goal with automation is to improve the borrower experience, increase efficiency, and lower operational costs. Open and frequent communication between project managers and operational employees is key to maintaining a successful RPA program that will continue to meet the efficiencies and savings goals you’re trying to achieve.

What's your advice for lenders just starting out with RPA?

Nolan: In my sales engineer role for HPA, lenders often ask me how they will benefit from a model like RPA-as-a-Service vs. building the program in-house. Lenders want to know if one is preferred over the other, and what the benefits and drawbacks are. I always tell them “Mortgage companies are not tech companies”. Lenders are trying to run a business centered on lending. They typically aren’t well-equipped with the time, expertise, and resources to build and run an automation initiative. There are already far too many elements of their business to manage, and RPA will take time and effort away from the lender’s core business goals.

The RPA-as-a-Service model keeps lenders focused on what really matters. An RPA-as-a-Service provider’s core business is automation, so lenders can count on them to infuse their automation strategy with maturity and scalability. Otherwise, lenders, or any company really, will sink thousands of hours and dollars trying to manage and scale their RPA initiative, all the while not getting where they want to be. Many who try to do an in-house RPA program find that after a few months of trying to build out the program, they’re actually worse off because they’re losing money on change management for broken processes that must then be worked manually. They’re right back where they started.

For lenders building RPA in-house, what should they look out for?

Nolan: As robots break, developers have to spend valuable time troubleshooting and developing resolutions. All the while, the robot is out of production and the lender is stuck with falling back on manual loan processing. Licensed RPA software providers offer lenders no guarantee of success. The lender assumes 100% of the risk. Can you imagine? Shelling out thousands for licensing and experienced RPA personnel, robots start breaking because the LOS pushed multiple updates, the initiative stalls, senior leadership has lost all faith in RPA, and all that responsibility relies solely on the business.

It’s a worst-case scenario for lenders who likely invested in RPA to alleviate this kind of pain in their business. It’s another unwelcome pain point on top of the typical strain created by industry regulations, the nature of originations, borrower expectations, the list goes on. RPA-as-a-Service eliminates all that risk and even lowers the cost of RPA ownership because the vendor fully manages the programs and takes responsibility for their clients’ success.

We'll be back soon with Part 4 of Ask a Mortgage Process Automation Expert. Stay tuned.