Zero-defect loans—the goal of every mortgage lending company. Unfortunately, these are hardly achievable without in-depth research and analysis on every mortgage loan applicant. But, new industry innovations like digital transformation have made zero-defect loans possible. 

Let’s get into what the digital transformation in the mortgage industry looks like and how technology can help improve how you interact with your customers.

How Is the Mortgage Industry Changing?

As the world becomes more automated, more and more home buyers want efficient and streamlined solutions for the mortgage application process. The mortgage industry has responded to this trend by implementing a variety of technologies, including the following:

API Adoption and Communication

Application programming interface (API) allows different applications to share information. Lenders can then expedite loan processing by extracting correct and relevant information from multiple sources, thus increasing processing speeds and improving data accuracy.

AI-Powered Document Scanning

Lenders and applicants alike have a mountainous pile of documents to fill out and sort through to complete the application and approval processes. Both processes can be significantly easier thanks to AI-powered intelligent document processing in the mortgage industry.

Scanners will look over both digital and physical documents to extract, identify and sort information. The indexable data helps reduce input errors and minimize busy work for loan officers who can focus on more important tasks, like making sure the applicant is qualified for the loan.

Self-Service Options

Today, many home buyers rely on—and even expect—an online solution for most of their needs. Ideally, they want loan applications to be as simple as ordering a burger on their phone. That means simple interfaces, quicker turnaround times and increased communication about the loan application status.

More lenders are developing their processes to meet those high expectations. This includes creating web applications that offer a completely digital experience, including digital document uploads, that help applicants get preapproved and lock in their interest rates.

What’s Causing the Change?

Many factors contribute to the accelerating digital transformation in the mortgage industry, including:

  • Applicant expectations for more convenience
  • Technological advancements (particularly in document processing)
  • Increased demand for an alternative digital solution

Another factor has also elicited a major change in the industry—and virtually every other industry in the world—COVID-19.

How COVID-19 Accelerated Digital Transformation in Mortgage

When COVID-19 first came onto the global scene in early 2020, many countries mandated stay-at-home orders. This meant digital solutions were no longer a luxury—they were the only option. Therefore, many mortgage lenders needed to accelerate their digital loan application processes to appease people who were still looking to purchase homes.

This resulted in many lenders suddenly having technology that was months ahead of what would’ve happened otherwise. And since the effects of the global pandemic have stretched for over a year, technological advancement was compounded and accelerated even further.

Where Is Digital Transformation Heading?

What we’ve witnessed thus far in digital mortgage processes is just the beginning. As technology improves and mortgage applicants look for more convenient application processes, the industry will become more streamlined and reliant on digital solutions. We can already observe one product of this advancement: hyperautomation.

Hyperautomation in Mortgage

Hyperautomation is the end-to-end automation of processes accomplished by harnessing multiple technologies. In the mortgage industry, hyperautomation can help lenders accelerate their response times or improve their predictive analysis, including their ability to monitor their mortgage applicants’ behaviors.

For example, lenders can use automation tools to predict when one of their homeowners may soon refinance their house. By combining intelligent document processing (IDP) technology to extract the data, it can feed that data into business intelligence platforms or other systems. Then, mortgage companies can take advantage of hyperautomation by monitoring specific data points, like rising home values, current interest rate levels and other potentially favorable market conditions.

How You Can Participate in the Transformation

If you’re a mortgage lender and haven’t gotten your start on digitally transforming your business processes, there’s no better time to start than now. Here are a few things you should consider doing to get started down the right path: 

  • Adopt an IDP solution. Integrating IDP technology into your mortgage application processes will help you improve employee efficiency, decrease data errors, and serve more customers at once.
  • Focus on data. Centralizing your lending strategy around rich data will help you make better business decisions and weed out people who aren’t qualified for your loans. Of course, using IDP will help you gather the information you need.

Get Started with Mortgage Digital Transformation

Are you ready to take your first steps towards digital transformation in mortgage lending? We’re ready to help guide the way. But first, check out how to Get One Step Closer to Zero-Defect Loans. This will help you figure out who to loan to without increasing your risk of losing time or profits.