Enabling Lending Business Imperatives with Office

Enabling Lending Business Emperatives with Office

Agenda
Automating the Lending Business Process
Measuring your Business
React and Adapt to Lending Trends
Reducing the Cost of Ownership
Building a Regulatory Compliant LOS
Empower Business Users

Lending Challenges in Banking
Strong Regulatory factors such as:
HMDA, CRA and Customer Privacy
Lending is process heavy with many un-needed manual processes
Lenders must deal with 40 unique documents that span up to 300 pages
Highly competitive landscape where products and the rates of those products give them the edge
Technology efficiencies can help:
A 30 year fixed mortgage rate offered online is an average 50 basis points lower than that available offline
* * US Market Forecast - JupiterResearch 2005

Why Automate?
Lending is process heavy with many un-needed manual processes
Lenders must deal with 40 unique documents that span up to 300 pages
Data re-entry leads to data duplication, increased error rates, and compliance issues

People-Ready Processes
Development of Business Processes
Develop new composite processes from reuse of existing systems
Deployment of Highly Distributed Processes
Intuitive end-user task interaction thru Office
Interaction with Collaborative Processes
Effective Management and Control of Distributed Processes
Business Process Modeling and Documentation
Visual Design of Electronic Forms
Visual Design of Collaborative Applications
Real-time Tracking of End-to-end Business Process Performance
Management Visibility into Business Process Performance
Real-time Process Optimization

Breadth of Processes Activity Complexity/Rigidity Example: Email, instant messaging, personal task list Example: Document approval, vacation approval Example: Expense reporting, management dashboard Example: Extending LOB applications, supply-chain Individual Ad hoc Human Semi Structured System Highly Structured Fixed Process Collaborative Processes Transactional Processes Individual Team Cross-Team Enterprise App

Breadth of Processes Individual Ad hoc Human Semi Structured System Highly Structured Fixed Process Collaborative Processes Transactional Processes Common Design Tools Common Monitoring Tools Common Runtime Collaboration Server Process Server

Four Core Business Process Areas Origination Mortgage Application Lock / Float Underwriting Closing 3 rd Party Services Title Flood Credit Mortgage Insurance Secondary Products & Pricing Securitization Bulk Pool Funding Servicing Loan Setup Investor Reporting Default Reporting Loan Transfer

Loan Process Before Approvals Legacy Systems Manual Semi-Automated Customer Care Data Entry Fax Mgmt Paper Mail Support Calls & Inquires Fax Document Filing Copy Services Many LOB Apps Paper Reviews Third Party Services

The Goal Approvals Legacy Systems Manual Semi-Automated Customer Care Data Entry Fax Mgmt Paper Mail Support Calls & Inquires Fax Document Filing Copy Services Many LOB Apps Paper Reviews Third Party Services

Loan Process Automated Automated Process Customer Care Document Archival LOB Apps Underwriters Legacy Systems Loan Origination Portal Brokers Enterprise Loan Orchestrations Automated Approvals Third Party Services

Healthy BPM Spending

Measure the Business Process
Business Process Management (BPM)
Provide KPI around Business Process
Surface KPIs through Portal Dashboards
Add Workflow Triggers and Alerts

Reacting and Adapting to Lending Trends
Industry Consolidation
Regions Bank acquired AMSouth which resulted in a reshuffle of the top 10 US Banks
Impacts of Natural Disasters Result in lending Automation
Market Forces (Interest Rates on the Rise)
As interest rates rise so will refinances
Customer Trends
20 – 50 million US residents do not have a credit history
Pure Lending Competition (E-Loan)
* Consumer Lending’s Top 10 in 2007– TowerGroup 2006 US Market Forecast - JupiterResearch 2005 Capture Leads Research online Request quote online Influenced by Internet Apply Influence Percentage of Online Consumers 16% 12% 8% 3%

Customers Shop Around US Market Forecast - JupiterResearch 2005
Can offer better rates based on abilities to Cross-Sell and Up-Sell
Architecture capable of reaching out to LOB systems for customer profile data such as if a high wealth customer
OR-LOS provides a way for lenders to collaborate better with brokers on deals
Percentage of Online Mortgage Applicants

Reacting to Fraud
Adaptive business activity monitoring for capturing suspicious activities
Extensible solution for adding Anti-Predatory lending solutions
Built in alerting mechanisms in the workflow
Rich collaboration features for Loan Officer and Underwriter Education on lending practices
Auditing and Versioning of information stored centrally
Mortgage Fraud has more than doubled f rom 436 (‘02) to 1,036 (‘07) FBI Financial Crimes and MBA Fraudulent Loans cost Lenders 1 Billion a year FBI Financial Crimes Customer Confidence Impacted US Market Forecast - JupiterResearch 2005 Percentage of Online Mortgage Researchers Who Did Not Apply Online

Keys to Reducing the Cost of Ownership
Reduce the amount of Paper
Printing paper is expensive
Mailing paper is expensive
Filing paper is expensive
Automate the Workflow
Reduces the amount of re-data entry
Less Human Touch Points
Loan Decisions
Process More Loans
Less errors & process bottlenecks equals increased volume!

Areas OR-LOS Automates
Automated Underwriting
Automated Pricing of Products
Streamlined Workflow
Reduction of Fax Machines and Copiers
Digital Signatures
Automated Approvals
Approvals Legacy Systems Manual Semi-Automated Customer Care Data Entry Fax Mgmt Paper Mail Support Calls & Inquires Fax Document Filing Copy Services Many LOB Apps Paper Reviews Third Party Services

OR-LOS Addresses Compliance
Identity & Access Management (IdM)
Data Privacy
Document Retention Policies
Separation of Duties
IT Governance
Application Deployment
Patch Management Procedures
Disaster Recovery and BCP

Building for Compliance Auditing Throughout Master Loan Flow (MLF) Activate Loan Active Loan Save Lock Services Underwriting Close Registration Pricing Lock Approval Process Products and Pricing Flow (PPF) Rate Entry Approval Processes Rates Published Blackout Over Loan Document Library Loan Data Warehouse Secure Authentication Data Stored on the Server Data Retention Policies Simplified Views into the Process Data Sent Securely Integration Services Underwriting Rules Decision Engine Enterprise Loan Orchestrations (ELO) Automated Approvals Automated Approvals

Empowering Business Users
Ability to add ad-hoc human process on to structured processes
Self Serve Dashboards with KPI’s and Reporting
Individual Team and Individual Sites for Information Sharing and Collaboration

Example: Current Rate Generation and Approval Process
Poor utilization of resources due to the manual steps required
Majority of the processes are paper based
Automation is difficult
Duplication of efforts all through the process
Duplicate data entry
Multiple imports
Lose control of formulas and validation
Document Retention Issues
Integration is a challenge

Leverage Existing Business Processes and Tools
Process can be automated
Business Users can augment the process
Add Approval Process
Send data to other users securely
Centralized Calculations Store
Calculations can be modified by business users
Business Processes Enabled Rates Document Library Workflow Table Rate Alerts LOB Integration Persist to database

Enabling Lending Business Imperatives with Office

by Mike Walker on Jan 19, 2009

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Enabling Lending Business Imperatives with Office — Presentation Transcript