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Enabling Lending Business Emperatives with Office
Agenda <ul><li>Automating the Lending Business Process </li></ul><ul><li>Measuring your Business  </li></ul><ul><li>React ...
Lending Challenges in Banking <ul><li>Strong Regulatory factors such as: </li></ul><ul><ul><li>HMDA, CRA and Customer Priv...
Why Automate? <ul><li>Lending is process heavy with many un-needed  manual  processes </li></ul><ul><li>Lenders must deal ...
People-Ready Processes <ul><li>Development of Business Processes </li></ul><ul><li>Develop new composite processes from re...
Breadth of Processes Activity Complexity/Rigidity Example:  Email, instant messaging, personal task list Example: Document...
Breadth of Processes Individual Ad hoc Human Semi  Structured System Highly  Structured Fixed Process Collaborative Proces...
Four Core Business Process Areas Origination  Mortgage Application Lock / Float Underwriting  Closing 3 rd  Party Services...
Loan Process Before Approvals Legacy Systems Manual Semi-Automated Customer Care Data Entry Fax Mgmt Paper Mail Support  C...
The Goal Approvals Legacy Systems Manual Semi-Automated Customer Care Data Entry Fax Mgmt Paper Mail Support  Calls &  Inq...
Loan Process Automated Automated Process Customer Care Document Archival  LOB Apps Underwriters Legacy  Systems Loan Origi...
Healthy BPM Spending
Measure the Business Process <ul><li>Business Process Management (BPM) </li></ul><ul><ul><li>Provide KPI around Business P...
Reacting and Adapting to Lending Trends <ul><li>Industry Consolidation </li></ul><ul><ul><li>Regions Bank acquired AMSouth...
Customers Shop Around US Market Forecast - JupiterResearch 2005 <ul><li>Can offer better rates based on abilities to Cross...
Reacting to Fraud <ul><li>Adaptive business activity monitoring for capturing suspicious activities </li></ul><ul><li>Exte...
Keys to Reducing the Cost of Ownership <ul><li>Reduce the amount of Paper </li></ul><ul><ul><li>Printing paper is expensiv...
Areas OR-LOS Automates <ul><li>Automated Underwriting  </li></ul><ul><li>Automated Pricing of Products  </li></ul><ul><li>...
OR-LOS Addresses Compliance <ul><li>Identity & Access Management (IdM) </li></ul><ul><li>Data Privacy  </li></ul><ul><li>D...
Building for Compliance Auditing Throughout  Master Loan Flow (MLF) Activate Loan Active Loan Save Lock Services Underwrit...
Empowering Business Users <ul><li>Ability to add ad-hoc human process on to structured processes </li></ul><ul><li>Self Se...
Example: Current Rate Generation and Approval Process <ul><li>Poor utilization of resources due to the manual steps requir...
Leverage Existing Business Processes and Tools <ul><li>Process can be automated </li></ul><ul><li>Business Users can augme...
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Enabling Lending Business Imperatives with Office

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Enabling Lending Business Imperatives with Office

  1. 1. Enabling Lending Business Emperatives with Office
  2. 2. Agenda <ul><li>Automating the Lending Business Process </li></ul><ul><li>Measuring your Business </li></ul><ul><li>React and Adapt to Lending Trends </li></ul><ul><li>Reducing the Cost of Ownership </li></ul><ul><li>Building a Regulatory Compliant LOS </li></ul><ul><li>Empower Business Users </li></ul>
  3. 3. Lending Challenges in Banking <ul><li>Strong Regulatory factors such as: </li></ul><ul><ul><li>HMDA, CRA and Customer Privacy </li></ul></ul><ul><li>Lending is process heavy with many un-needed manual processes </li></ul><ul><li>Lenders must deal with 40 unique documents that span up to 300 pages </li></ul><ul><li>Highly competitive landscape where products and the rates of those products give them the edge </li></ul><ul><li>Technology efficiencies can help: </li></ul><ul><ul><li>A 30 year fixed mortgage rate offered online is an average 50 basis points lower than that available offline </li></ul></ul>* * US Market Forecast - JupiterResearch 2005
  4. 4. Why Automate? <ul><li>Lending is process heavy with many un-needed manual processes </li></ul><ul><li>Lenders must deal with 40 unique documents that span up to 300 pages </li></ul><ul><li>Data re-entry leads to data duplication, increased error rates, and compliance issues </li></ul>
  5. 5. People-Ready Processes <ul><li>Development of Business Processes </li></ul><ul><li>Develop new composite processes from reuse of existing systems </li></ul><ul><li>Deployment of Highly Distributed Processes </li></ul><ul><li>Intuitive end-user task interaction thru Office </li></ul><ul><li>Interaction with Collaborative Processes </li></ul><ul><li>Effective Management and Control of Distributed Processes </li></ul><ul><li>Business Process Modeling and Documentation </li></ul><ul><li>Visual Design of Electronic Forms </li></ul><ul><li>Visual Design of Collaborative Applications </li></ul><ul><li>Real-time Tracking of End-to-end Business Process Performance </li></ul><ul><li>Management Visibility into Business Process Performance </li></ul><ul><li>Real-time Process Optimization </li></ul>
  6. 6. 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
  7. 7. 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
  8. 8. 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
  9. 9. 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
  10. 10. 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
  11. 11. 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
  12. 12. Healthy BPM Spending
  13. 13. Measure the Business Process <ul><li>Business Process Management (BPM) </li></ul><ul><ul><li>Provide KPI around Business Process </li></ul></ul><ul><ul><li>Surface KPIs through Portal Dashboards </li></ul></ul><ul><ul><li>Add Workflow Triggers and Alerts </li></ul></ul>
  14. 14. Reacting and Adapting to Lending Trends <ul><li>Industry Consolidation </li></ul><ul><ul><li>Regions Bank acquired AMSouth which resulted in a reshuffle of the top 10 US Banks </li></ul></ul><ul><li>Impacts of Natural Disasters Result in lending Automation </li></ul><ul><li>Market Forces (Interest Rates on the Rise) </li></ul><ul><ul><li>As interest rates rise so will refinances </li></ul></ul><ul><li>Customer Trends </li></ul><ul><ul><li>20 – 50 million US residents do not have a credit history </li></ul></ul><ul><ul><li>Pure Lending Competition (E-Loan) </li></ul></ul>* 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%
  15. 15. Customers Shop Around US Market Forecast - JupiterResearch 2005 <ul><li>Can offer better rates based on abilities to Cross-Sell and Up-Sell </li></ul><ul><li>Architecture capable of reaching out to LOB systems for customer profile data such as if a high wealth customer </li></ul><ul><li>OR-LOS provides a way for lenders to collaborate better with brokers on deals </li></ul>Percentage of Online Mortgage Applicants
  16. 16. Reacting to Fraud <ul><li>Adaptive business activity monitoring for capturing suspicious activities </li></ul><ul><li>Extensible solution for adding Anti-Predatory lending solutions </li></ul><ul><li>Built in alerting mechanisms in the workflow </li></ul><ul><li>Rich collaboration features for Loan Officer and Underwriter Education on lending practices </li></ul><ul><li>Auditing and Versioning of information stored centrally </li></ul>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
  17. 17. Keys to Reducing the Cost of Ownership <ul><li>Reduce the amount of Paper </li></ul><ul><ul><li>Printing paper is expensive </li></ul></ul><ul><ul><li>Mailing paper is expensive </li></ul></ul><ul><ul><li>Filing paper is expensive </li></ul></ul><ul><li>Automate the Workflow </li></ul><ul><ul><li>Reduces the amount of re-data entry </li></ul></ul><ul><ul><li>Less Human Touch Points </li></ul></ul><ul><ul><li>Loan Decisions </li></ul></ul><ul><li>Process More Loans </li></ul><ul><ul><li>Less errors & process bottlenecks equals increased volume! </li></ul></ul>
  18. 18. Areas OR-LOS Automates <ul><li>Automated Underwriting </li></ul><ul><li>Automated Pricing of Products </li></ul><ul><li>Streamlined Workflow </li></ul><ul><li>Reduction of Fax Machines and Copiers </li></ul><ul><li>Digital Signatures </li></ul><ul><li>Automated Approvals </li></ul>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
  19. 19. OR-LOS Addresses Compliance <ul><li>Identity & Access Management (IdM) </li></ul><ul><li>Data Privacy </li></ul><ul><li>Document Retention Policies </li></ul><ul><li>Separation of Duties </li></ul><ul><li>IT Governance </li></ul><ul><li>Application Deployment </li></ul><ul><li>Patch Management Procedures </li></ul><ul><li>Disaster Recovery and BCP </li></ul>
  20. 20. 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
  21. 21. Empowering Business Users <ul><li>Ability to add ad-hoc human process on to structured processes </li></ul><ul><li>Self Serve Dashboards with KPI’s and Reporting </li></ul><ul><li>Individual Team and Individual Sites for Information Sharing and Collaboration </li></ul>
  22. 22. Example: Current Rate Generation and Approval Process <ul><li>Poor utilization of resources due to the manual steps required </li></ul><ul><li>Majority of the processes are paper based </li></ul><ul><li>Automation is difficult </li></ul><ul><li>Duplication of efforts all through the process </li></ul><ul><ul><li>Duplicate data entry </li></ul></ul><ul><ul><li>Multiple imports </li></ul></ul><ul><ul><li>Lose control of formulas and validation </li></ul></ul><ul><li>Document Retention Issues </li></ul><ul><li>Integration is a challenge </li></ul>
  23. 23. Leverage Existing Business Processes and Tools <ul><li>Process can be automated </li></ul><ul><li>Business Users can augment the process </li></ul><ul><ul><li>Add Approval Process </li></ul></ul><ul><ul><li>Send data to other users securely </li></ul></ul><ul><li>Centralized Calculations Store </li></ul><ul><ul><li>Calculations can be modified by business users </li></ul></ul>Business Processes Enabled Rates Document Library Workflow Table Rate Alerts LOB Integration Persist to database

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