We can rebuild it. We have the technology.
Mortgage IT has often lagged behind other industries in technology adoption. The reasons are nuanced, a mixture of justifying costly investments, an unsure cybersecurity environment, and fear of taking human experts out of the mortgage process. Yet a more advanced mortgage process is no longer something that might be good—sticking with the old ways is now a competitive liability. Let’s dive into common fears in the digital age of mortgages and how to overcome them:
Every company is concerned with a return on their investments, and hesitate to spend a million on digital infrastructure that won’t bring a million+1 in revenue. Plus clients don’t want the cost falling down to them, as a digital mortgage is slightly less convenient if it costs twice as much to originate.
Worry no longer–it’s been proven that digitization makes the lending process more efficient. For instance, Rocket Mortgage (Quicken Loans’ digital mortgage) reduced their turnaround time for a loan by an average of eight days. That kind of speed gives an irresistible competitive advantage and cuts costs simply because employee time is money. Cutting costs, according to Fannie Mae chief economist Doug Duncan, should allow more borrowers at the margins into the market for loans. Think student debt-riddled Millennials.
One drawback of mortgage tech going digital and cloud-based is that it becomes more vulnerable to hacking. 70% of banks cite Cybersecurity as a top concern. Social security numbers, names, addresses, finances and plenty of other sensitive information is exchanged when a client buys a home. Mortgage data is a gold mine for identity fraud—not to mention the reputational damage for lenders.
Sadly, nothing can be 100% secure, and even analog methods had their risks. Yet by weighing your data security needs proportionally with digitization efforts, you can become 99% secure. Paul Lewis from T&M Protection Resources recommends a common security framework such as NIST’s Framework for Improving Critical Infrastructure Cyber-security that has ISO 27K. Don’t blame yourself if you google that one.
The Human Factor
Employees are worried that the rising amount of digitization will mean less jobs for living beings, and some customers still desire a human face in the process too. Yet when done well, mortgage IT can exist to supplement human efforts and adjust human touch points rather than replace entire jobs. According to the Bureau of Labor Statistics, the employment rate for loan officers is projected to grow 8% by 2024 despite technology growth.
Imagine an appraiser that can upload property photos or checklists through a tablet instantly rather than a days-long paper trail. Or software that manages vendors from a centralized platform which syncs in real-time, catching issues in a matter of minutes rather than weeks. Technology will attract young employees to these aging careers while making the experience better for all involved.