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What’s Next in Digital Lending? 4 Key Drivers

Predicting what’s next for digital lending is a challenge – and the best path for your bank on the road to digital might not be the same as that of your competition.

What is true for every bank, however, is that seamless, digital-first experiences can transform the mortgage process, driving higher customer satisfaction, lower costs and greater profits.

In a recent webinar hosted by American Banker, experts from Flagstar, Notarize, Teraverde and Kofax discussed how to take advantage of the latest process automation technology and recognize current trends, as well as predictions for what the industry can expect.

The panelists identified four considerations driving “what’s next” in digital lending:

Defining digital maturity

A clear vision is an essential first step, and organizations should consider the end point they desire from the very beginning. Basically, your vision should guide your technology transformation (not the other way around). Digital transformation encompasses all of the ecosystem stakeholders within a business. Yet it’s a good idea to charge one key stakeholder to lead that vision, someone who is driving and delivering the message to those ecosystem partners to ensure everyone is aligned.

On that note, outsourcing your roadmap is not recommended. The business needs to own the plan and the vision from start to finish, and, if necessary, built the competency internally to do so before beginning.

“The vision, or the ‘North Star’ must be very explicitly articulated and then the digital strategy built around how each individual company wants to attack the three elements of the vision – customer experience, delivery of a defect-free loan and profitability” – Jim Deitch CEO, Teraverde, and Author, Digitally Transforming the Mortgage Banking Industry.

Optimizing the customer experience

The customer experience should never be “bolted on”; it should be woven into any roadmap and vision. For every human or technical touchpoint, the business must ask: What is the customer thinking? What is the customer doing?

The ability to understand the customer’s perception is critical; their perception is your reality. Simply adding on an element of “digital” to the lending process without considering the entirety of the user experience can create a disjointed workflow that alienates customers.

“The front, middle and back office processes that fulfill the loan have to be linked directly to the customer experience throughout the beginning to end journey.” – Dermot McCauley, VP of Product Marketing, Kofax.

Taking advantage of the latest technology

Many technologies make processes much easier and can really reduce the burden on employees and drive down costs. For example, consider software that takes in documents and visually classifies them (as a bank statement, pay stub, etc.) before putting them in a proper folder or document destination during loan processing. Data extraction technology can automatically extract the data from incoming documents and then compare the data to what’s on file; any discrepancies can be identified and addressed before the loan progresses.

Robotic process automation (RPA) is also gaining major traction in performing and advancing tasks without human intervention. Employees can spend time on more valuable work, while software robots take over the manual, error-prone tasks that cause delays and inefficiencies.

Related: Digital Transformation Decoded: What Your Bank Might Have Missed

Realizing the hidden efficiencies of digital lending

Awareness is key; businesses must go through the exercise of mapping their processes end to end for both the internal value chain and the customer journey. This should be the starting point. There’s no silver bullet, and to maximize the benefits, it’s key to challenge the mindset of how things have always been done. It’s a continuous cycle of learning and steady rel="noopener noreferrer" improvement.

Watch this webinar to learn from these industry “mavericks” transforming the mortgage process into a seamless, digital-first experience that both employees and customers love.