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This Coronavirus Crisis is an Inflection Point in the Rapid Adoption of AI Solutions

Corona Virus Tile

Companies are realizing they can no longer sit on the sidelines. The time to automate vital back office functions is now.

There’s a cartoon going viral on social media right now which shows a group of employees sitting around a boardroom table listening to their manager who is saying ‘Digital transformation is years away. I don’t see our company having to change any time soon.’  Unbeknownst to any of them, outside the window, a giant black wrecking ball is swinging towards the office with the words Covid 19 printed on it.

It’s a perfect summation of the way that the global pandemic has upended the ways all of us are working and accelerated the speed of transformation towards a more robust digital back office. 

Banks and mortgage lenders have been notoriously reluctant to adopt new ways of working, but that is changing fast. Suddenly, there is a sense of urgency in the air and the value of a well-managed digital transformation is becoming clear to everyone. No doubt this is as a result of two factors; the huge backlog in processing applications that has been created as a result of the huge spike in refinancing that is taking place, and the lack of employees who are being asked to stay home and not go to work during this time.

A Spike in Refinancing

People are taking advantage of the fact that interest rates are at record lows to try and address the new economic uncertainty they are feeling. According to CNBC, ‘The average rate on the 30-year fixed mortgage fell to a record low of 3.29%. That drop means that now nearly 13 million borrowers can save money by refinancing their home loans and lowering their current rates by at least 75 basis points, according to Black Knight, a mortgage data and analytics company.’

AI Foundry President Stephen Butler agrees with that assessment, noting that ‘our customers are having record days and weeks for new applications and lockups and for closings. We’re getting quite a few pleas for help to deal with the volume of new applications and volumes of closing that clients need to sort and package and sell off to investors. For us, it’s quite a boom time.’

AI Foundry’s volume of business is up four times from a year ago, and the company is processing thousands of loan applications per day. That’s because companies big and small are responding to the ways in which AI Foundry’s technology can provide the kind of elastic processing that they need to solve their problems.

The Value of Elasticity Processing

One of the most successful attributes of Artificial Intelligence is its agility and scalability. The ability to scale up solutions quickly when you have high volumes of business is easy to achieve when you’re using AI-driven cognitive robots. And in much the same way, you can reduce the workload quickly when the business slows down again.

The mortgage business is very seasonal. Engaging a team all year around gets very expensive. Elastic processing technology is key to running a tight, profitable organization.

The irony of this current refinancing rush is that it has come at the exact time when the workforce is being instructed to stay at home and not go into work. That’s made the application backlog formidable and as a result, is making AI Foundry’s software more valuable than ever. For example, if you have a couple hundred pages of documents that have to be sorted, indexed, filed and put away so that they can be sold to investors, then that’s a big time-consuming job for the back office staff. Previously it would require new hires, training and lots of man hours to get it all done, but AI Foundry’s Digital One Office can achieve all that in a matter of hours. As the need for refinancing grows, companies are going to lean heavily on A.I tools that have the intelligence to assist a loan processor and take care of many of the manual tasks that previously would have been done by a full back office staff. 

Butler firmly believes that kind of elastic productivity is where the industry is heading. ‘When the spike comes, you can spin up without hiring people. When you have the trough in the industry, you don’t have those costs that you need to go cut.’

Ramping Up Deployment

One of the most important aspects of new A.I applications is the speed with which they can be deployed and operational.  We have found that if the period of integration is too long for consumers, it’s too easy for them to label the tech as ‘too disruptive’ and pack it away for later, or simply to hire more staff instead who can get going on the work that urgently needs to be done.

That’s why rapid deployment is so vital, and it’s something that AI Foundry has been focused on for the past year. This approach is fairly new, according to Butler, but it was a response to what the market really needed. ‘In terms of rollout, previously we were there with everyone else, which meant 6 - 12 months to provide an AI solution’.  After a lot of work and development, the company’s solution is now ready to go ‘off the shelf’. Clients can deploy a robot within a few days that can begin on tasks such as the indexing filing of documents and dramatically ease the burden on the back room staff. ‘We heard from customers saying “if you want us to embrace AI, you’re going to have to make it easy for us to adopt it.” So that’s what we did.’

Farewell to the Follower Mentality

For too long, CTO’s of banks and mortgage lenders have been standing on the sidelines, waiting for others to go first. But those days seem to be over now. What the pandemic has revealed to many companies is that their biggest vulnerability is their total reliance on a human workforce. If they cannot get enough staff to process all the required paperwork, then their entire process grinds to a halt. With labor being such a vital issue to address, there is suddenly an accelerated move to digital processes which can largely automate the back office, and keep the systems running.

While this pandemic crisis caught almost every company unaware, the question CTO’s should be asking themselves right now is ‘How do we protect ourselves from the next disruption?’. For many, the answer is an investment in technology, and the early adopters who get to grips with integrating technology into their processes right now, will undoubtedly stand to benefit with the increased workload that all lenders are experiencing, and be ready for when the next crisis hits.

Learn more about AI Foundry’s Cognitive Robots and how they are transforming mortgage and lending organizations across the country.