The digital mortgage back-office revolution

out 27, 2021 - 7 min read
Robbie Avill, Product manager at Sopra Banking Software

The pandemic forced rapid digitization in the mortgage industry, but many lenders have focused the majority of their energy on front-end technology. While improving the customer experience has obvious value, mortgage providers should not neglect other aspects of the process. Doing so ignores the fact that around 60 percent of mortgage customer dissatisfaction issues can be traced to the back office. 

For a customer to receive a mortgage offer, the process itself can take anywhere between 18 and 40 days due to the manual checks and necessary processes as well as the multi-system involvement needed to produce an offer. As this is a lengthy process, costs could be reduced by eradicating manual and complex back-office processes. Indeed, according to Capgemini, lenders who have embraced new digital tools and workflow automation have saved an estimated 30 percent by choosing to streamline their back office.

Mortgage transformation through automation

Omnichannel interactions are becoming expected, and they’re great from a customer experience (CX) perspective, but they also underscore the need for back-office optimization. This is because paper or manual processes are challenging to maintain in an omnichannel environment. When it comes to mortgages, there are often more errors when information comes from multiple touchpoints.

Automated workflows in practice

With the introduction of workflow automation, organizations have the opportunity to streamline and optimize their mortgage back office, therefore, reducing the time to offer and meeting ever-changing customer expectations. All-digital processes reduce human error and provide a single source of truth for customer data. Digital tools can process routine mortgage application checks, including credit check responses, scores and valuation results. These can all be validated based on a lender’s predefined configuration. If those checks are all satisfactory, the application can be progressed to the next stage with no need for manual intervention. With the advent of automated valuations models (AVMs) a lender can thus potentially produce the offer in less than one minute.

Based on an internal Sopra Banking Software survey, 43 percent of consumers say they would be “likely” to use a digital channel to track the status of their mortgage application. This being the case, a system can be easily set up to send updates via text or email directly to either internal staff or straight to a broker. If a mortgage is non-advised, this could be direct to the consumer. In turn, the number of calls from brokers and consumers can also be reduced, ensuring customers are serviced through more convenient digital channels, and organizations are spending their time more effectively.

If at any point a check fails or a result does not meet the required levels – for instance, county court judgements or valuation amounts –  the case can be seamlessly transferred to the manual workflow along with the details of the issue. This will allow underwriters to spend time addressing only the issues that truly need attention. Once the problem has been resolved, the case can be put back in the automated queue for further processing.

Should no issues arise, an application can go from submission—be that via the broker portal, customer portal, a sourcing engine, or branch—all the way to offer and potentially further with zero manual input.

Catering to different needs

Smaller lenders, for example, regional building societies, may continue to prefer a more personal approach by using a more traditional “hands-on” business model for new mortgage sales. Even in these situations, automation can help such lenders cut costs and improve their standard service.

For instance, automated tools can be used when results like credit checks or valuations are automatically uploaded via interfaces with Equifax, Quest, etc., indicating any problems. If there are none, the case owner can update the applicants knowing that the results have been accepted. In this way, the digital process provides more information for person-to-person interactions.

In addition, where a broker or customer has provided electronic contact details, messages can be sent automatically to keep the client fully informed, therefore contributing to a good customer experience and, in turn, higher retention rates.

Automation accommodating a digital future

The number of individuals who complete a digital mortgage application is rising steadily in nearly every generational borrower segment. The good news is that there are now many powerful mortgage workflow tools designed to help lenders be more flexible and efficient.

Back-office automation also gives lenders more visibility of their customer relationships, it helps segment with greater precision, and it informs more personal customer experiences. Moreover, by automating the mundane “checking” tasks, this allows your people to focus on the high order tasks and exceptional cases.

The bottom line is that as consumers increasingly inhabit digital spaces, expectations trend toward greater speed and efficiency. To win new customers and retain market share, lenders need insights to focus their efforts, and they need greater back office efficiency. 

Find out more about how Sopra Banking Software can help you by visiting our UK Building Society page.