By John Park
Supporting today’s seemingly endless list of regulatory mandates is one of the biggest challenges facing servicers. Despite numerous regulations, there is still a wide range of practices and policies in how mortgage loans are administered. The ability to adhere to a set process is essential to managing compliance in such a tight environment and reducing risk while delivering improved customer experiences across the board.
Even among servicers that use the same technology systems, widespread differences in processes can exist. It is not surprising servicers do things differently from one another to distinguish themselves from their competitors. Even differences in the ways servicers use the same technology platforms are understandable when we consider their different policies. In some cases, differences exist, even within a single servicer, in how transactions are performed from one agent to the next.
To understand why this might be the case, it is necessary to look at the conditions that lead to possible process discrepancies including:
- The flexibility of the platform: Systems rich in parameters and settings can provide tremendous flexibility to accomplish what servicers need but can present a confusing amount of data and options to the processor. If you’ve ever glanced in the cockpit of a large passenger airplane as you boarded and seen the complexity of switches, instruments, and controls, a loan servicing system can appear equally intimidating.
- Focus on the end result: Provided the outcome is satisfactory, management may be less interested in the step-by-step details of the journey than successful arrival at the destination.
- Multiple applications in use: Processors who use multiple applications to perform their jobs often find their own methods to maximize efficiencies in their work. This self-driven discovery for efficiency can lead to variations in how processors work.
Inefficiency is just one way discrepancies in process can negatively impact lenders. Inconsistent processes can mean a greater likelihood for error and that important steps are missed or completed out of order. This increased risk and exposure can lead to compliance violations of both business policies and regulatory mandates and result in borrower dissatisfaction.
The solution: workflow process automation
An approach to address these issues is through process automation. Process automation involves the orchestration of data and activities in a set sequence or process definition. There are two broad categories of process automation. The first category includes processes that require an agent to provide some level of decision, and the second applies to processes that can be executed without agent intervention based on well-defined values and conditions. Processes requiring agent assessment are facilitated through a standard user interface (UI). The UI orchestrates the presentment of appropriate data for a task and cues the agent to take relevant action. Because the UI leads the agent through the tasks, errors due to steps performed out of order or omitted are eliminated. At the same time, differences in how individual agents performed a transaction are eliminated, as all agents are assisted by the same workflow UI. Having a UI-assisted workflow is especially important for longer-cycle processes, which require agents to revisit the process at various stages.
Those processes that have set actions based upon well-defined values and conditions are strong candidates for complete automation. You may have encountered these processes if you’ve observed agents performing highly repetitive activities in which they appeared to follow well established rules rather than truly making a decision on the disposition of an account.
Reap the benefits of process automation
Realizing operational efficiency in servicing resides with loan servicing systems that support process automation. As mortgage servicing grows in complexity, servicing systems must be able to ensure consistent processes in compliance to regulations and business policy. Automating process enables servicers to reduce errors and risk. Most importantly, process-enabled operations provide a better customer experience, which is what ultimately all servicers desire.
John Park is a senior product manager of lending solutions at Fiserv, Inc. He can be reached at John.Park@Fiserv.com.