{"id":14659,"date":"2020-06-08T20:59:09","date_gmt":"2020-06-08T15:29:09","guid":{"rendered":"https:\/\/coforge.site\/cigniti\/blog\/?p=14659"},"modified":"2022-08-01T16:55:25","modified_gmt":"2022-08-01T11:25:25","slug":"digital-mortgage-software-application-testing","status":"publish","type":"post","link":"https:\/\/coforge.site\/cigniti\/blog\/digital-mortgage-software-application-testing\/","title":{"rendered":"How digital mortgages are reshaping the lending ecosystem"},"content":{"rendered":"

A reimagined and reshaped lending ecosystem can improve the experience of borrowers, reduce the loan processing time, and facilitate operational efficiency & transparency.\u00a0<\/span>\u00a0<\/span><\/p>\n

Traditionally, a mortgage process takes an average of roughly 46 days for completion, costing the lending institution about $2000 to $2500 per loan. Not only is the traditional process lengthy and tedious, its reliance on the paper-based transactions through over 30 touch points and interactions resulted in unpredictable delays, higher costs, inefficiencies, and poor customer experience.\u00a0<\/span>\u00a0<\/span><\/p>\n

With the introduction of digital solutions in the mortgage industry, the five steps of mortgage origination \u2013 initial consideration, application, processing, underwriting, and closing \u2013 can be completed in a period of a few hours to a couple of days.\u00a0<\/span>\u00a0<\/span><\/p>\n

What is a digital mortgage<\/span><\/b>\u00a0\u2013 impact, benefits, and challenges<\/span><\/b>\u00a0<\/span><\/p>\n

KPMG<\/span><\/a>\u00a0defines digital mortgage as \u201ca holistic experience for the borrower, starting with targeted marketing and lead generation to the initial application to processing to underwriting to closing and beyond with postclose audits and marketing<\/span>\u201d and believes that it is not just about having an online application on your website but including automation into every step of the way with minimum to no human interaction.<\/span>\u00a0<\/span><\/p>\n

KPMG estimates that with digital mortgage solutions, 20-30 percent in top-line growth and 30-50 percent in sustainable cost savings is achievable evaluating a set of impacted KPIs.<\/span>\u00a0<\/span><\/p>\n

A\u00a0<\/span>digital mortgage origination journey<\/span><\/a>\u00a0can reduce costs per loan by 10 percent, shorten the loan processing time by 15 to 40 percent, and reduce the underwriting touches per application by 15 to 40 percent by promoting higher collaboration among internal stakeholders and borrowers using technologies such as chatbots, videos, interactive calculators, e-notes, and self-serve online tools.<\/span>\u00a0<\/span><\/p>\n

By leveraging digital mortgage solutions, the lending institutions can observe a 75 percent increase in sales productivity, a 20 to 25 percent increase in the pull-through rate, 25 to 50% decrease in the origination costs, and 25 to 40% reduction in the cost to service. As customer expectations are changing along with the shifting market dynamics and evolving technology, digital mortgage can have a significant positive impact on the customer experience.\u00a0<\/span>\u00a0<\/span><\/p>\n

Digital mortgage is about streamlining the origination journey and offering a quick and smooth buying experience to the borrowers. It eliminates the necessity for wasting long hours in filling lengthy application forms and collecting documents, optimizes product solution by using data intelligence, facilitates instant conditional approval and transparency throughout the process so that the consumers are aware of every transaction and status,\u00a0<\/span>offers the customers the choice of automated and manual support, and provides the option of electronic closing to reduce\u00a0<\/span>the need for in-person meetings.<\/span>\u00a0<\/span><\/p>\n

Legacy IT systems and a lack of collaboration between businesses, risk, IT, and operations functions can fail the digitization efforts of the lenders. As digital mortgage solutions are heavily dependent on data analytics, the limited data access and required skills can also pose a huge challenge. Further, there is a general disbelief in the automated systems. Taking a mortgage is often the most important decision of a consumer\u2019s life and they might not trust an automated process with zero human intervention in supporting such a major decision.<\/span>\u00a0Regulatory hurdles are also a major concern for lenders who are approaching digitization of their mortgage services. In fact, as per a survey, 64% say compliance and related challenges represent a significant or very significant challenge to digitized mortgages.<\/span>\u00a0<\/span><\/p>\n

The technologies driving the future of mortgage<\/span><\/b>\u00a0<\/span><\/p>\n

Some of the major technology trends in the mortgage sector are:<\/span>\u00a0<\/span><\/p>\n