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Digital Transformation

Mortgaging Customer Goodwill

Almost every week we see another story in the national press about how “unfeeling banks” are  foreclosing  on a homeowner over an 80 cent payment error, or foreclosing on a house the bank doesn’t even own. After several social media blogs, several thousand tweets and retweets (with fiery commentary) and various news networks report the story, invariably a long suffering spokesperson provides the standard reply concerning privacy laws, and the inability to comment concerning individual customer loans.  These stories serve as another piece of kindling on a large fire that is damaging the industry, adding to lost customer trust, and increasing rhetoric for yet more regulation of an “evil industry”.

Reality Check

Of course those of us in the industry understand what no consumer wants to hear.   Mortgage processing systems were never designed to support the needs of today’s mortgage operations.  Between legacy mainframe integrations with hundreds of point to point  connections to consumer internet banking, call center, and platform  desktop applications the chance of certain transactions (both trivial and rarely occurring) having a high degree of failure, especially under the strain of large volumes of work  is high.  Coupled with the resulting monolithic Data Warehouses needed to understand and report  the state of mortgages, packaged loan placements,  servicing and compliance reporting activities, many banks are dealing with a proverbial  “MacGyver” scenario in which IT and Business Managers hope their Mortgage systems can hold together until the crisis eases or budget to replace their mortgage platforms can be acquired.

Baby Steps

For most organizations, a complete replacement of a Mortgage Lending platform is not an option, so what is a beleaguered bank to do?

Many banks are finding success in implementing Business Process Management solutions and Enterprise Service Bus tools to effectively manage the very data and decisions that are so often in conflict between legacy processing systems and customer facing applications.  By creating a “hit list” of processes which have the highest degree of failure or are the most labor intensive and coupling the technology to agile development methodologies, banks can incrementally design and implement fixes much more quickly and cheaply than traditional IT projects while reducing overall risk.

For banks that don’t have the time or budget for even modest infrastructure upgrades,  implementing  a stronger data governance and Master Data Management policy can help untangle the data jumble that comes from multiple systems of record and disparate data sources for mortgage records.  Working to simplify data feeds while auditing database designs and taxonomy can allow a bank to refocus Mortgage and customer information to provide more accurate insights to business

While these approaches may cause some banks to take pause as more risky than a traditional waterfall or top down design approaches, customers aren’t soon going to forget these headline grabbing issues.  Banks that take the lead in making stories like those above become just a bad memory will be the banks that are positioned to take advantage of the economic recovery while retaining and winning new customers for the long term.

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