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  • Aug 2, 2020
  • Satish Thiyagarajan

Loan Origination Automation

The mortgage industry is known for being highly process-oriented and engages a wide number of players for loan processing, including loan officers, processors and underwriters across processes such as fraud checks, appraisal orders, title orders and so on. Besides this the banking and mortgage lending involves many complex processes and the constant need for compliance.

Lending customers today expect a lot from their lenders. They want instant responses to inquiries. They expect online portals which can process their requests anytime anywhere. Above all the lending customer today looks at faster, if not instant, loan approvals and processing. However, most lenders due to their highly regulated and complex process are unable to achieve their customer goals. Moreover, in the current business scenarios, lenders have no option but to look at all possible levers to drive their revenues and reduce costs wherever possible.

Lenders can today leverage the cognitive abilities of Intelligent Process Automation (IPA) to automate more complex tasks like the onboarding, application processing, due diligence, underwriting and others while they can automate the routine tasks with the use of RPA. This combination of IPA and RPA can not only manage high volume rule-based tasks but also the intelligent tasks like reconciliation and validation using technologies like computer vision, natural language processing and machine learning.

Such an orchestration of bots can store and manipulate data, process transactions, communicate with other digital systems, and trigger responses. These bots have the ability to generate accurate results and avoid errors. Collotech’s IPA bots for mortgage lenders are designed to deliver the hyper-automation needs of the business.

This Loan Origination System Needed Transformation

This customer who is a leading loan origination system provider works with multiple banks and lenders and had a uniform experience across their customers. As there are multiple players involved in a loan origination process, the current approach to business-critical tasks can make interdepartmental and even employee-to-employee coordination difficult and is a leading cause of errors. Besides the partial automation achieved through LOS was not helping any of their lending customers cut down the loan approval time, which was running at an abysmal 7 - 10 days.

Due to the large volumes of data inputs in form of documents being manually processed, the error rate was over 10 percent and this was evident from the reworked applications.

Our Approach

Collotech helped this LOS provider map the entire loan origination process across 12 of the lenders they were working with to identify process gaps and error rate at each process transition. We designed and implemented our IPA bots to automate the mailroom application and classify the loan applications and the corresponding documents based on product category and type. The bots would further extract data from various documents like title deeds, identification documents, supporting collaterals, etc in order to validate the information available on the CRM.

The integration of IPA bots with the LOS was further enhanced with the robotics process orchestrator to completely eliminate both inefficiency and error while freeing up manpower to work on things where brainpower is better deployed.

CIPA Bots Enabling The Loan Origination

Today, the CIPA bots are work relentlessly with the LOS and the human resources managing the loan origination process and are performing all aspects of those tasks with an even higher level of precision and efficiency than human employees. They are also able to perform these tasks at speeds that are dramatically faster than humans could ever achieve.

These bots not only effectively manage data processing from semi structured and unstructured documents but also get into the contextual understanding of this data and process it with high accuracy.

The combination of Collotech’s technology stack, advanced automation algorithms and consulting services has enabled this LOS provider to support their customers significantly grow without adding headcount while bringing down the error rate. With more efficiently controlled costs, more resources are now available to ensure quality customer experiences.

80%

Reduction in the overall loan application processing time, down from 7-10 days to within 24 hours.

20%

Reduction in resource cost across lenders through redeployment of these resources to enhance customer experience.