Rising interest rates, new compliance measures and increased 3rd-party risk are just a few of the reasons why the mortgage industry is changing. Lenders today that want to maintain strong productivity are meeting some trouble: 77% of banks surveyed by the ABA report seeing delays in loan closings to an average of 8 days due to necessary TRID measures, and more than 70% of those same lenders are still waiting on updates from their software vendor to address those compliance needs. Delayed adoption of upgraded technology––including analytics––has affected the overall efficiency of their operations. How can lenders effectively adapt without the tools to achieve and measure progress?
Invest in New Key Performance Indicators (KPIs)
An evolving mortgage industry requires key performance indicators that evolve with it. Lenders must reconsider practices as granular as client service speed, how they enter data, communication methods, software compatibility and more. Every little bit helps when improving performance. Lenders will benefit from onboarding integrated analytics which include service providers to create full intelligence of their transactions. Analytics works best when used to discover what aspect of your business “bottlenecks” the experience. Keep finding an hour to trim off and it will add up to days of saved time.
For instance, are you measuring the amount of outstanding orders that have not yet been completed by service providers (known as the pipeline)? Orders that overstay in the pipeline delay the closing, and ultimately increase the cost-to-close while the client is made to wait. Imagine if lenders were able to instantly determine which service providers emptied their pipeline the fastest. Better providers would receive the reward of more allocations, and lowering cost-to-close allows lenders to consider making competitive deals by lowering fees. Being shy about long term investments, like technology or employee training, will make it more difficult for lenders to navigate the market sooner than they might think.
One System Is Better Than Many
To best measure KPIs, it is more important than ever to bring disparate business pieces under one system lenders can easily manage. Using one portal to track internal metrics and several others to track service providers is an unnecessary loss of efficiency and deprives lenders of the complete picture. Creating manual workarounds is a temporary solution at best. Mitigate compliance risks with a broader knowledge of 3rd-party stakeholders based in the context of your business. Embrace modern analytics technology and KPIs to ultimately lower costs and compete.
The industry climate can become an opportunity under the right circumstances. Using analytics under one system, combined with holistic KPIs, can reveal previously unseen trends that improve your business if addressed. The way we do mortgages is changing––why not change with it? For a more in-depth breakdown of specific KPIs to investigate, read our whitepaper.