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Digital mortgages and the evolving lending landscape

The role of technology in mortgage lending has been a hot topic over the past few years, with novel solutions percolating into the ecosystem and making their presence felt. While traditional mortgage processes are still in play, there are shortcomings and challenges that both the lenders and the borrowers face.

Here’s discussing how the lending landscape is evolving with the arrival of the ‘digital mortgage lending’ trend.


Why traditional mortgages are rendering themselves obsolete?

Mortgage origination is a long-drawn process in itself as it involves several complex steps, with the most significant ones being:

  • Initial consideration
  • Application
  • Application and loan processing
  • Underwriting
  • Loan closing

On an average, a traditional mortgage could take more than a month to complete the entire process - from application to closing. From both a borrowing and a lending perspective, this is time consuming. Today’s customers demand shorter turnaround time, rapid loan processing, and greater convenience through the mortgage process. All these demands make sense from the lenders’ point of view, too, because this precious time can be better utilised to pursue fresh leads, close more loans, and deliver a better user experience to customers.

This is where digital mortgage in the lending space is proving to be a game changer.


How digital mortgage is transforming the lending ecosystem?

By definition, digital mortgage is expected to help deliver a holistic experience to the borrower or the customer while enabling the lender to use innovative technologies and processes to optimise the entire mortgage process.*

From targeted marketing and lead generation activities to loan closing and auditing, digital mortgage can help the lender accelerate, shorten, and improve the entire mortgage lifecycle. In the recent past, we have seen businesses adopt a mix of hyper-automation, real-time digital mortgage applications, and big data analytics to achieve maximised productivity and minimum delays or errors. Let’s take a look at the key benefits that digital mortgage as a concept offers.

  1. Cost, productivity, and speed
  2. Digital mortgage solutions can reduce the costs per loan, effectively resulting in sustainable cost savings. The influx of smart technologies and digital solutions enables lenders to close loans faster (compared with a traditional mortgage lifecycle). Lenders can look at increased sales productivity, as the digital mortgage journey directly affects the loan processing times (with reduced human intervention at various stages of the process).  

  3. Transparency
  4. The lack of 360-degree visibility into the mortgage process creates issues because certain bottlenecks cannot be predicted or addressed before they become a major roadblock. Digital mortgage solutions create an ecosystem with increased transparency and visibility throughout the process, enabling lenders to be in control.

  5. Risk management
  6. Accuracy, compliance, and security are among the top challenges in traditional mortgage processes. However, with digital solutions, you can now integrate intelligent risk solutions across KYC and AML (anti-money laundering) with predefined policies and checklists to ensure total compliance. This helps safeguard your workflows against potential fraud and reduces the associated risks.

  7. Collaboration
  8. Digital solutions allow for a greater degree of collaboration between various stakeholders involved in a mortgage lifecycle. For example, the use of chatbots, videos, and self-service web portals makes collaboration easier and more streamlined.

  9. Convenience
  10. Delivering a remarkable customer experience is one of the top priorities for businesses today, and digital mortgages help achieve this KPI by integrating modern and user-friendly interfaces that make the information exchange hassle-free.  

  11. Marketing
  12. A significant benefit of digital mortgage solutions is that they create multiple cross-selling and up-selling opportunities for the lender. The use of advanced analytics allows businesses to respond quickly to customer needs and align their solutions according to what the borrowers expect.

  13. Competitive advantage
  14. Data analytics for smarter decision-making; automation via technologies like AI, ML, and RPA; and rapid loan processing through the use of digital solutions give you a distinct competitive advantage, thus helping you work towards creating a data-driven enterprise.


Fast-track your digital mortgage journey with Infosys BPM

At Infosys BPM, our team has a proven track record of assisting lenders and servicers in their digital mortgage transformation journeys with:

  • Expert consultants who can deliver solutions that blend people, processes, and technology.
  • A dedicated Mortgage Centre of Excellence (CoE) leveraging experience from 50+ global mortgage clients to help you with cutting-edge best practices.
  • A robust ecosystem of partner and in-house solutions across the mortgage value chain offering the best of both worlds - innovation and agility.
  • Commitment to deliver and partner throughout your digital mortgage and lending transformation journey, not just ‘advise.’

Learn how Infosys BPM can help you accelerate your journey towards creating the best possible borrower experience.

*For organisations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed on organisational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like a living organism, will be imperative for business excellence going forward. A comprehensive, yet modular suite of services is doing exactly that. Equipping organisations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper- productivity, Live Enterprise is building connected organisations that are innovating collaboratively for the future.