Back to Industry Trends & Insights

Benefits of Adding Cognitive Robots to Your Mortgage Application Process

Blog Robots Web Tile

There are multiple reasons why lenders are deploying cognitive robot technology to their processes for consumers who demand tech-driven financial solutions.

By Steve Butler, Founder & President, AI Foundry

It’s hard to believe but it’s true; there are millennials who are approaching middle-age. Members of that generation who we think of as being permanently hip, carefree and youthful are sprouting their first gray hairs, moving to the suburbs and fretting about their kids’ college funds.

In fact, there is now a whole next generation entering the housing market and looking to connect to financial institutions in ways that make sense to them. They were born in the early ‘90’s and straddle the boundary between Millennials and Generation Z. If you thought that the senior millennials expected fast, mobile-first technology, then you can double that expectation for those now looking to finance their first homes. 

These digital-natives had technology thrust upon them from the moment they could sit up on their own. The idea of waiting six to eight weeks for feedback on a mortgage application strikes them as ridiculous - like describing a black-and-white movie or having to sit and listen to the radio waiting for the song that you like.

They have grown up with instant results, delivered into the palm of their hands and that’s the way they like it. So when it comes to buying a home, they expect companies to be pursuing tech-driven strategies that embrace artificial intelligence and computer vision in order to deliver quickly and effectively.  That’s why AI-driven, automated loan manufacturing in 2020 is non-negotiable.

Waiting weeks, or sometimes even months, on a mortgage application in 2020 is simply unacceptable. The good news is that the tools to meet these demands are available, and lenders can partner with third-party tech providers like AI Foundry to implement them without disruption.

"Millennials are well-educated on their options as homeowners and have played a major role in driving the refinance market in 2019," Joe Tyrrell, chief operating officer at Ellie Mae, according to the National Mortgage News website.

Reinventing the Application Process

Harnessing the power of artificial intelligence (AI) is key in transition from a cumbersome and error-prone system to one that is slick, fast and accurate. AI is a broad term, but three areas in particular are transforming the lending process: Computer Vision, Intelligent Process Automation and Machine Learning. 

The nature of a traditional mortgage application lends itself to delays. The gathering, processing, reviewing and storage of various document types often means that delays are inevitable. From the gathering of pay stubs and W2’s, to marriage certificates, multiple application forms, dozens of signatures, followed by the process of scanning, faxing, emailing and collating of the documents even begins, the process is cumbersome. With so much detail to take care of, it’s almost a surprise when nothing goes wrong.

Yet, these very detailed oriented tasks are exactly the kinds of areas where AI flourishes and can achieve in seconds what it takes people days to do. Not only does AI make the whole process faster but can help banks solve specific processing problems and increase productivity by more than 20%, freeing employees to focus on building relationships with customers. The removal of humans from the process enables a faster and more affordable process that delivers much higher quality. Furthermore, the system frees up the employees to focus on customer-centric tasks where they consistently outperform technology.

Managing Loan Defects with Robots

One of the principal tasks of a back office is to perform the quality and compliance tasks required to approve an applicant’s loan by finding any defects that exist in the application. Those defects can range from issues with home appraisal to missing documents, discrepancies between documents and so on. There are hundreds of rules that need to be adhered to in a substantial mortgage application, and manually removing those defects is the main reason that loan processing takes so long.
Cognitive robots are transforming those mundane tasks such as data capture, verification and transferring of information and slashing the time it takes and the cost of back office processing. These robots are employing machine learning to ‘learn’ about thousands of document types and how to process them. In the process, they acquire an understanding of the compliance required in different states around the U.S and can repair the defects while simultaneously meeting those compliance requirements

Three Key Benefits of Implementing Agile Mortgages Solution:

  1. Streamline Your Operations: The massive leaps forward in technology are allowing organizations to break down the walls between front and back office operations, perform “vertical-specific tasks” in various industries and give organizations the space to redeploy staff to more customer-focused tasks. 
  2. Reduce Errors, Defaults & Fraud: Agile Mortgages solutions deploy cognitive robots to critical points along the loan manufacturing process for the monitoring and verifying of information. By using AI in this manner, companies can minimize loan defects, speed up the process and get a better ROI. When an error is detected, loan officers are alerted quickly to fix the problem and keep the application moving through the system.  
  3. Provide World-Class Service: Nothing frustrates consumers more than a lack of feedback and unexplained delays. Using AI, computer vision and machine learning means that consumers are kept in the loop and informed every step of the way. If a document is missing, the system can pick it up and inform the applicants instantly, as opposed to the delays that inevitably occur when employees must ‘stare-and-compare’ documents.

In AI Foundry’s experience, mortgage applications can sometimes require up to 300 different types of documents, which can make the process appear overwhelming. The deployment of cognitive robot technology ensures that documents are passed through defect-elimination rules automatically, and that level of automation releases staff from performing manual stare-and-compare tasks where errors can often creep in to the system. This greater efficiency and accuracy naturally lead to a faster application processing, lower costs, happier clients and bigger profits.

There is a well-known saying that goes ‘The best time to start was 20 years ago. The second-best time to start is now.’ If your lending organization has not yet figured out how to provide a new generation of consumers with the kinds of service that they require, then make 2020 the year where you work with an experienced digital partner like AI Foundry to add the power of automation into your mortgage application process.

Are you ready to find out what our cutting-edge technology can do for your operations? Get in touch with AI Foundry today to set up a consultation and discover how we can propel your business into the new era.