Back to Industry Trends & Insights

Productivity or Efficiency: What Really Matters to Lenders

Social Prod Efficiency Img

“By systematically removing obstacles to productivity, deploying talent strategically, and inspiring a larger percentage of their workforce, leaders can dramatically improve productivity and reignite top-line growth.” - Harvard Business Review

Efficiency and productivity in business are terms that are often used interchangeably. But in fact, there are enlightening distinctions between the two that can teach us something.  While efficiency is concerned with doing the same amount using fewer resources, productivity refers to doing more with the same amount of resources, according to a Harvard Business Review article entitled Great Companies Obsess Over Productivity, Not Efficiency. 

In today’s digital economy, banks and mortgage lenders that are looking to grow need to include intelligent software that is able to address both their efficiency and productivity needs and aspirations.

Too often, employees working in data-driven organizations spend a large chunk of their time doing repetitive, dull tasks that may be valuable in terms of data quality, but that do not engage their talents in any way. Over time, this kind of ‘stare-and-compare’ work drains employees of any enthusiasm and creativity.

Not only are these tasks bad for morale, but they often introduce errors into the system as employees lose focus and rush through these tasks. Ironically, these kinds of repetitive, pattern-recognition tasks are exactly the environment where Artificial Intelligence thrives and adds real benefits for companies. That’s one of the reasons why there is so much enthusiasm for software bots that can augment the lending process and take the pressure of time-strapped employees whose talents can be used far more efficiently elsewhere in an organization, while also driving down costs.

AI Foundry President & Founder Stephen Butler recently told MReport that “the new category of technology-powered lenders are driving their internal costs lower and their loan turnaround times shorter, making them more competitive against the traditional lenders who are seeing costs continue to grow.”

That same HRB article mentioned earlier concluded that “the average company loses more than 20% of its productive capacity — more than a day each week — to what we call “organizational drag” - the structures and processes that consume valuable time and prevent people from getting things done.”

That 20% is a massive loss to any organization and an area of operations that can clearly be targeted for improvement. Kyle Manseau, the vice-president of organizations at the Allied Mortgage Group has seen AI technology boost productivity in his firm by between 300 and 400%. He understands first hand the drag that ‘stare-and-compare’ tasks have on his employees. In a recent AI Foundry webinar, Manseau explained how ‘employees resist doing the mundane tasks. The same repetitive process gets boring. Installing the right technology solutions means that we can put people into more challenging roles and take the stare and compare work off their plate. The technology can do that now - it wasn't there a few years ago.’

Inside every organization there are star players who can make a tremendous contribution if they are empowered with the right resources and assigned the right tasks. The HBR article claims that “inspired employees bring more discretionary energy to their work every day. As a result, they are 125% more productive than an employee who is merely satisfied.”

The Role of Automation in Boosting Efficiency

Inside the loan life cycle, experts have pinpointed more than sixty areas where automation can play a valuable, time-consuming role. By integrating computer vision, machine learning, and robotic processing, AI Foundry is providing a platform that is transforming the loan life cycle and providing employees with tools that are transforming their relationship to the work they do.

Examples of software-enabled processes:

  • Application - automating the process of verifying standard eligibility requirements
  • Processing - Performing initial checks of documentation relating to an applicants income, assets and property
  • Underwriting - automate the process of verifying more detailed checks for title, lien, income and property related checks for loans delivered to Fanne Mae
  • Closing & Post-closing: software that conducts loan data integrity checks, identifies missing documents and provides quality control reports
  • Purchasing - due diligence required before transfer of ownership and TRID verification.

These are just some examples where the integration of software bots into the processing workflow can relieve the burden on overworked employees and produce far better results for clients who are used to same-day delivery in other areas of their lives. Steve Butler agrees, saying that “For millennial buyers, the idea of supplying documents and waiting a couple of weeks to find out whether or not they supplied all the documents the bank needs and whether or not those documents are correct and support their application is unacceptable…they don’t want to wait two weeks. They want to know within 24 hours, and maybe even within an hour. You’re only going to do that with AI and with automation.”

Software Integration Cannot Be Part of The Problem

One of the aspects of AI Foundry’s software that most impressed Kyle Manseau was the integration process. Allied Mortgages is a small company with a large, dynamic workload. “Most companies are not designed to have an army of people for new technology,” explains Manseau. “We brought in our closing manager who handles that aspect, our IT guy and myself. The way that you guys deployed it to us allowed us to stay focused. Despite the fact that it was just the three of us and we all had day jobs, we were able to put it into production. “

Efficiency is the process of achieving your goals by using fewer resources. This is often achieved by reducing staff and shifting the burden onto the remaining staff to maintain the same level of output. However, automation offers a better solution, where the more repetitive parts of the process deliver greater efficiency and accuracy while freeing up staff to engage in more creative, client-facing tasks.  

The Harvard Business Review concludes with these words “By systematically removing obstacles to productivity, deploying talent strategically, and inspiring a larger percentage of their workforce, leaders can dramatically improve productivity and reignite top-line growth.”

To find out exactly how AI Foundry can transform efficiency within your own organization, please get in touch today.