Enabling Lending Business Emperatives with Office
Jan 15, 2015
Enabling Lending Business Emperatives with Office
AgendaAutomating the Lending Business Process
Measuring your Business
React and Adapt to Lending Trends
Reducing the Cost of Ownership
Building a Regulatory Compliant LOS
Empower Business Users
Lending Challenges in BankingStrong Regulatory factors such as:
HMDA, CRA and Customer Privacy
Lending is process heavy with many un-needed manual processes
Lenders must deal with 40 unique documents that span up to 300 pages
Highly competitive landscape where products and the rates of those products give them the edge
Technology efficiencies can help:A 30 year fixed mortgage rate offered online is an average 50 basis points lower than that available offline*
* US Market Forecast - JupiterResearch 2005
Why Automate?Lending is process heavy with many un-needed manual processes
Lenders must deal with 40 unique documents that span up to 300 pages
Data re-entry leads to data duplication, increased error rates, and compliance issues
People-Ready ProcessesDevelopment of Business Processes
Develop new composite processes from reuse of existing systems
Deployment of Highly Distributed Processes
Intuitive end-user task interaction thru Office
Interaction with Collaborative Processes
Effective Management and Control of Distributed Processes
Business Process Modeling and Documentation
Visual Design of Electronic Forms
Visual Design of Collaborative Applications
Real-time Tracking of End-to-end Business Process Performance
Management Visibility into Business Process Performance
Real-time Process Optimization
Activity Complexity/RigidityActivity Complexity/Rigidity
Example: Email, instant messaging, personal task list
Example: Document approval, vacation approval
Example: Expense reporting, management dashboard
Example: Extending LOB applications, supply-chain
IndividualAd hoc
Human Semi Structured
System Highly Structured
FixedProcess
Collaborative ProcessesCollaborative Processes Transactional ProcessesTransactional Processes
Breadth of Processes
IndividualAd hoc
Human Semi Structured
System Highly Structured
FixedProcess
Collaborative Processes Transactional Processes
Breadth of Processes
Common Design Tools
Common Monitoring Tools
Common Runtime
Collaboration ServerProcess Server
Four Core Business Process Areas
Origination Mortgage Application
Lock / Float
Underwriting
Closing
3rd Party ServicesTitle
Flood
Credit
Mortgage Insurance
SecondaryProducts & Pricing
Securitization
Bulk Pool
Funding
ServicingLoan Setup
Investor Reporting
Default Reporting
Loan Transfer
Approvals
Legacy Systems
Loan Process BeforeManualSemi-
Automated
Customer Care
Data Entry
Fax Mgmt
Paper Mail
Support
Calls
&
Inquires
Fax
Document
Filing
Copy Services
Many LOB Apps
Paper Reviews
Third Party
Services
Approvals
Legacy Systems
The GoalManualSemi-
Automated
Customer Care
Data Entry
Fax Mgmt
Paper Mail
Support
Calls
&
Inquires
Fax
Document
Filing
Copy Services
Many LOB Apps
Paper Reviews
Third Party
Services
Loan Process Automated
Automated Approvals
Automated Process
Customer Care
DocumentArchival
LOB Apps
Underwriters
Third Party
Services Legacy Systems
Loan Origination
Portal
Brokers
Enterprise Loan
Orchestrations
Healthy BPM Spending
Measure the Business ProcessBusiness Process Management (BPM)
Provide KPI around Business Process
Surface KPIs through Portal Dashboards
Add Workflow Triggers and Alerts
Reacting and Adapting to Lending Trends
Industry ConsolidationRegions Bank acquired AMSouth which resulted in a reshuffle of the top 10 US Banks
Impacts of Natural Disasters Result in lending Automation
Market Forces (Interest Rates on the Rise)
As interest rates rise so will refinances
Customer Trends20 – 50 million US residents do not have a credit historyPure Lending Competition (E-Loan)
* Consumer Lending’s Top 10 in 2007– TowerGroup 2006
Capture Leads
Research online
Request quote online
Influenced by Internet
Apply
Influence
Percentage of Online
Consumers16% 12% 8% 3%
US Market Forecast - JupiterResearch 2005
Customers Shop Around
2%
10%
13%
16%
20%
20%
27%
29%
35%
48%
0% 20% 40% 60% 80% 100%
Other
Increase chances of approval
Track status of application
Lower closing costs
Calculators
Apply in evenings/on weekends
Better access to information
Faster loan approval
Get better rate
Save time
Percentage of Online Mortgage Applicants
US Market Forecast - JupiterResearch 2005
Can offer better rates based on abilities to Cross-Sell and Up-Sell
Architecture capable of reaching out to LOB systems for customer profile data such as if a high wealth customer
OR-LOS provides a way for lenders to collaborate better with brokers on deals
Reacting to FraudAdaptive business activity monitoring for capturing suspicious activitiesExtensible solution for adding Anti-Predatory lending solutionsBuilt in alerting mechanisms in the workflowRich collaboration features for Loan Officer and Underwriter Education on lending practicesAuditing and Versioning of information stored centrally 29%
11%
5%
6%
6%
13%
20%
20%
21%
30%
0% 20% 40% 60% 80% 100%
Did not apply for a mortgage at all
Other
Process was not entirely automated
Insufficient information provided
Application was too time consuming
Didn't find the right mortgage
Would not trust the Internet
Had security concerns
Didn't want to enter information online
Needed to talk to agent
Percentage of Online Mortgage Researchers Who
Did Not Apply Online
Mortgage Fraud has more than doubled from 436 (‘02) to 1,036 (‘07)
FBI Financial Crimes and MBA
Fraudulent Loans cost Lenders 1 Billion a year FBI Financial Crimes
Customer Confidence Impacted
US Market Forecast - JupiterResearch 2005
Keys to Reducing the Cost of Ownership
Reduce the amount of PaperPrinting paper is expensive
Mailing paper is expensive
Filing paper is expensive
Automate the WorkflowReduces the amount of re-data entry
Less Human Touch Points
Loan Decisions
Process More LoansLess errors & process bottlenecks equals increased volume!
Areas OR-LOS Automates
Automated Underwriting
Automated Pricing of Products
Streamlined Workflow
Reduction of Fax Machines and Copiers
Digital Signatures
Automated Approvals
Approvals
Legacy Systems
ManualSemi-Automated
Customer Care
Data Entry
Fax Mgmt
Paper Mail
Support Calls
& Inquires
Fax
DocumentFiling
Copy Services
Many LOB Apps
Paper Reviews
Third Party Services
OR-LOS Addresses ComplianceIdentity & Access Management (IdM)Data Privacy Document Retention Policies Separation of DutiesIT GovernanceApplication DeploymentPatch Management ProceduresDisaster Recovery and BCP
Auditing Throughout
Building for Compliance
Master Loan Flow (MLF)
Activate Loan Active Loan SaveLock ServicesUnderwriting Close
Registration Pricing LockRegistration Pricing Lock Approval ProcessApproval Process
IntegrationServices
UnderwritingRules
Decision Engine
Enterprise Loan Orchestrations (ELO)
Products and Pricing Flow(PPF)
RateEntry
ApprovalProcesses
RatesPublished
BlackoutOver
Loan DocumentLibrary
Loan Data Warehouse
Automated Approvals
Automated Approvals
Secure Authentication
Data Stored on the Server
Data Retention Policies Simplified
Views into the Process
Data Sent Securely
Empowering Business Users
Ability to add ad-hoc human process on to structured processes
Self Serve Dashboards with KPI’s and Reporting
Individual Team and Individual Sites for Information Sharing and Collaboration
Example: Current Rate Generation and Approval Process
Poor utilization of resources due to the manual steps required
Majority of the processes are paper based
Automation is difficult
Duplication of efforts all through the processDuplicate data entryMultiple importsLose control of formulas and validation
Document Retention Issues
Integration is a challenge
Leverage Existing Business Processes and Tools
Business Processes Enabled
Business Processes Enabled
Rates Document Library
Rates Document Library
WorkflowTable
Rate AlertsRate Alerts
LOB IntegrationLOB Integration
Persist to databasePersist to database
Process can be automated
Business Users can augment the process Add Approval
Process Send data to other
users securely Centralized Calculations
Store Calculations can be
modified by business users