Executive Summary
The extreme market conditions caused by the COVID-19 pandemic revealed systemic inefficiencies in even the largest of home mortgage lenders. We are confident that smart investment in data and analytics tools, and the strategy to support them, can make your firm and its processes are resilient to future market volatility. In addition to making your organization better prepared to handle future challenges, automated data capture and processing ensures all of your decisions are supported by the facts and figures. We make an argument for the importance of business intelligence for lenders in the aftermath of the COVID-19 pandemic.
Background
Last March, mortgage rates fell to historic lows, triggering a surge of both prospective homeowners excited to finance a new home, and current homeowners looking to refinance for better rates. The Mortgage Bankers Association reported that the home lending market hadn’t experienced such a load since 2009, and consequently even large, nationwide lenders like Navy Federal Credit Union reported experiencing processing times of up to six months, unable to cope with a fourfold increase in volume. Institutions’ inability to rapidly process and assess applications revealed deep flaws and inefficiencies in how leaders in the industry manage their data, and make their decisions.
In 2019, less than two fifths of lenders surveyed by Ellie Mae reported having dedicated budget specifically to data and analytics, with less than a quarter using data to predict future trends. While many lenders have responded to the extreme stress caused by the pandemic by implementing automated solutions for document management and review, and data entry and validation, most lenders remain without a defined data and analytics digital strategy.
The Necessity for Data-Driven Decisions
Failing to leverage your data means missing opportunities to contain cost and accelerate growth. Once you have systems in place to capture and process vast datasets, you’re gaining comprehensive, cross-sectional insights into mortgage operations, from loan production efficiency analysis, to risk assessment. This unprecedented visibility pays colossal dividends across the entirety of your enterprise. Tactical and strategic overviews offer leadership new vantage points from which to discover untapped markets and hidden inefficiencies in all of your workflows, allowing you to iterate, optimize and automate with ease. Driving systems and decisions with hard data has the potential to reduce production costs and probability for human error. Organizations can even use customer and market data to provide customers with personalized services that anticipate their needs and desires, fueling growth.
More than allowing your operations to expand more quickly, automated data management and analysis puts lenders in greater control of their organizational processes, and offers resilience against economic shocks like those presented by the pandemic. Visualized metrics and key performance indicator displays enable lenders to get up to date at a glance, 24/7. With business intelligence solutions to collect, track, interpret and present information from the origination process, management functions are easier than ever. A unified business intelligence solution offers organizations a single point of access for all that information, reducing costs and ensuring that both operational managers and organizational leadership are always making decisions based on facts and figures derived from the business, and cleaned using a well-defined, yet iterative process.
The Necessity for Data-Driven Decisions
The application of data analysis and business intelligence tools to the home mortgage industry is a process in constant evolution, and if lenders aren’t actively searching for new and innovative ways to leverage and analyze data to optimize, differentiate and expand their operations, they’re surely falling behind in today’s high-volume lending market. Keeping up with demand, avoiding excessively long closing times, is key to maintaining both customer satisfaction and long-term profitability, in this volatile environment. If you can’t detect and destroy issues and inefficiencies in your process as they arise, you’re always falling behind, and getting ahead means analyzing your data to discover problems, and make intelligent decisions.
Using data to understand and interpret past events is only part of the effort: the ability to use data to make intelligent decisions about the future is the defining feature of a lender prepared to survive and thrive into 2022 and beyond. Deriving past, present and future insights from across mortgage operations is what provides this ability, and a custom-fit, organization-spanning business intelligence tool is the key to deriving these insights.
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