Ash Omar, account manager at HPA, and Nolan Johnson, sales engineer at HPA, joined Eric Kujala, senior manager of product marketing at ICE Mortgage Technology, on a recent webinar to discuss how change management is impacting lender automation initiatives.
Historically, lenders were slower to adopt robotic process automation, or RPA, as a vehicle for moving more loans with less effort. Many lenders preferred to solve this problem as they always had, by hiring additional people to take on the ever-expanding workload. As the market grew more and more competitive, and skilled talent were short in supply, lenders quickly recognized the need to operationally level up with robots.
Key business drivers for automation adoption
Unprecedented margin compression and market fragmentation continue to drive lenders to seek more modern methods of loan production. The combination of manual processes and increasing regulations have resulted in U.S. origination costs that are three times higher than a decade ago. Consumers have also become accustomed to the speed and convenience of a digital experience. On top of these factors, the global pandemic continues to introduce volatility and uncertainty in the market.
As lenders bring automation into their organizations, they need to understand the initial and ongoing impact of RPA technologies, particularly if they plan to build and manage it independent of a consultant or service provider. As Nolan tells his clients all the time “lenders are in the business of lending, not automation”. In-house RPA initiatives can distract lenders from their core business, and change management is arguably the biggest contributing factor. Change management encompasses a variety of changes, from organizational and process changes to managing the robots themselves.
Processes ideal for automation
RPA is ideal for origination processes for a variety of reasons. Robots eliminate errors and reduce risk, give employees more time to build relationships, and process loans 24/7 to keep loans moving nights, weekends, and holidays.
HPA currently automates roughly 80% of the loan cycle, as illustrated in the heat map below.
Seven key factors to RPA success:
- Form an automation center of excellence (COE)
- Evaluate current and future state of the business and where you want to go with RPA
- Build a business case to prioritize what gets automated first (or at all)
- Determine roles and responsibilities for employees AND robots
- Define success metrics for each robot, and how those get measured and reported
- Define an automation roadmap to scale the initiative over time
- Secure the resources and form a plan for change management
Adopting an automation mindset helps organizations prepare for and succeed with RPA. Effective change management practices have proven to be an effective tool for planning change management activities, equipping your leaders facilitating change, and supporting your employees throughout the change.
The five steps for effective change management:
- Awareness – recognize the need for change
- Desire – support and encourage change
- Knowledge – create a strategy for change
- Ability – demonstrate skills and behavior for success
- Reinforcement – make changes stick
Click on the link below to hear more insightful commentary from Ash, Nolan, and Eric on RPA and managing change in your organization.