The combination of robot process automation (RPA) and artificial intelligence (AI) is intelligent automation, and it is about to disrupt the mortgage space.
Already, bots are entering into the mortgage lending process at various points, said Ari Gross, CEO of the AI-based mortgage automation vendor SoftWorks AI, at last week’s HousingWire webinar, “Reimaging mortgage processing with intelligent automation.”
“We’re seeing that bots have a major role to play in everything from pre-underwriting to underwriting to mortgage insurance to post-close due diligence,” Gross said. “What was once impossible is in fact becoming reality.”
Banks such as Fifth Third, BMO Harris Bank, Wells Fargo and U.S. Bank have all tapped mortgage automation fintech Blend to automate the paper-based aspects of their mortgage processes. The average mortgage can require up to 400 pages of paper, Blend CEO Nima Ghamsari told Bank Automation News in December, adding that the fintech’s banking customers have reduced the amount of paper used by 75% and shaved about nine days off the entire process.
Today, Blend announced its acquisition of Title365, which provides insurance and settlement services for mortgages. Bringing these elements to Blend’s automation platform will simplify and speed the mortgage-buying experience, Ghamsari said. The webinar panel also included Craig Le Clair, a principal analyst with the IT research firm Forrester, and Matt Lautz, CEO of the Neostella, an RPA solutions and consulting service that partners with RPA vendor UiPath.
Intelligent automation takes place in three stages, each marked by function and relevant technologies, as well as knowledge and rules, Le Clair said. Stage one centers on attended and unattended automations, but involves technologies such as surface automation, computer vision, central orchestration and desktop analytics.
“You know, stage one is really rooted in task automation,” Le Clair said. “It’s highly deterministic, there’s no AI component, there’s no learning component; you’re doing what Harry was doing in the back office, but you’re doing it with a bot. That’s where we are now; that’s the reality [for] a lot of companies.”
Stage two, which banks are now entering, is enhanced digitalization, which includes functions like invoice and email management, and document handling, and uses technologies such as optical character recognition (OCR), natural language understanding, machine learning and rules.
“Here is probably the most important part of this discussion, relative to the mortgage industry: the ability to go into unstructured content, semi-structured content, and be able to normalize it to extract clean sets of data,” Le Clair said.
Ahead, in stage three, RPA becomes an automation orchestrator, and encompass chatbot support, exception handling and decision management, all enabled by machine learning, deep learning and conversational intelligence. This is where banks will be able to automate underwriting and perform other decision management functions that currently require humans, Le Clair said.
But when it comes to mortgage lending, where does automation stand right now?
Currently, the focus is on automating much of the documentation process, said Neostella’s Lautz. The automation does this by pulling from multiple listing service (MLS) systems and eliminating redundant data entry into loan origination systems (LOS), thus speeding the process and reducing errors.
“Automation or RPA can extract data from hundreds of documents involved in a long process, and then allow you to input those data elements into your LOS autonomously without a human involvement,” Lautz said. “RPA robots allow your team members to be focusing on the things that they need to be doing — not typing data, not classifying documents, not transferring data from an MLS site or from an investor site. Those are great use cases for automation.”
But while intelligent automation will soon disrupt mortgage lending, the panel’s consensus was that the technology and banks are not quite at that point yet.
“The space will be disruptive,” said Gross, of SoftWorks AI. “It’s almost here. Companies with that capability will be able to process loans in near real time, and dynamically scale with increased demand. It appears to be a game-changer in the mortgage industry, and it seems to be just around the corner.”
Bank Automation Ignite, on April 13-14, is the event for inspiring automation initiatives and investment in financial services. At the virtual event, financial services professionals can discover new use cases and technologies that are accelerating automation in banking. Learn more and register at www.BankAutomationIgnite.com.