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6 Reasons the Mortgage Industry Needs Intelligent Document Recognition

by | Apr 26, 2021

Buying a new home is exciting. It’s full of possibilities, and buyers are anxious to move forward with the next chapter of their lives. Despite their enthusiasm, many people watch those feelings fade as mortgage processing drags on.  There are forms to complete, papers to sign, and documents to find. Many buyers wonder why the mortgage industry hasn’t moved towards a more digital process. 

Homebuyers are not the only ones questioning why the mortgage industry, especially financial institutions, lags in its digital transformation. Consultants, researchers, and educators have been asking that question for years. Why isn’t the industry adopting technologies such as robotic process automation (RPA) or intelligent document recognition (IDR)?

Intelligent document recognition.

Intelligent Document Recognition (IDR) uses artificial intelligence (AI) technology to classify structured and unstructured documents such as income verification or proof of employment. After a document is classified, the data is extracted and stored for later retrieval. The data becomes accessible to employees as well as automated processes such as RPA.

As with humans, AI-based IDR learns through experience. The solution remembers which responses are correct and which answers need additional information. It then refines its model to deliver more targeted information. Because of its diverse capabilities, IDR forms the basis for many automated processes in the mortgage industry.

Support automated processes.

Before a loan application can be sent for approval, loan officers must ensure that all the required paperwork is included. That process is labor-intensive and time-consuming. It’s also perfect for automation. Assembling the information is the same as going through a checklist to see what has and hasn’t been submitted.

With IDR, information is submitted, classified, extracted, and stored. An RPA process is notified, and an item is checked off the list. The RPA solution notifies the loan officer of the added documentation. This process keeps officers up-to-date on their loans without spending hours accumulating the information. They can use that time to pursue additional loan opportunities or contact existing customers for missing information.

Process mortgages faster. 

IDR, when combined with automated workflows, can significantly increase the speed at which mortgages are processed. AI-based IDR can read documents and extract data faster than its human counterparts. Not only is the technology faster, but it never sleeps, takes a vacation, or has sick days. IDR continues to process loan documents, even when loan officers are out-of-the-office.

If the technology identifies an exception during its initial processing, it escalates the item to the appropriate loan officer. The officer can quickly notify the buyer of the missing information so the process is not delayed. Now, those eager buyers can realize their home-owning dreams sooner and with less frustration.

Increase productivity.

If loan officers are not bogged down by paperwork, they are available to service more loan applications. They can pursue more opportunities and deliver a level of customer service that sets a company apart from the rest of the industry. With IDR and RPA solutions, documents are captured, converted, classified, and routed to the appropriate destination 24-hours a day.

Technology reduces the chance of error. It doesn’t skim over a possible error or incorrectly copy data from one form to another. If it finds a discrepancy, the technology can be programmed to escalate the exception to a human for resolution. Instead of wading through mounds of paperwork, loan officers only have to address questionable information. Automating the process helps loan officers become more productive.

Improve customer service.

When potential buyers call about the status of their loans or with a specific question, customer service personnel can find the information quickly if an IDR solution has processed documents. Once processed, documents can be stored in searchable formats, making it easier for employees to find the correct information. 

Instead of placing buyers on hold, agents can query the system to locate the information needed to answer a question. There’s no need to transfer them to another person or tell them someone will get back to them.  Providing fast and accurate responses increases the customer experience.

Enhance employee experience.

Employee productivity is closely tied to positive work experiences. Removing boring and repetitive tasks such as reviewing loan documents or transferring data from hard copy to digital can help make employees feel more valued. It also frees individuals to perform more challenging tasks such as building relationships or learning new skills.

With IDR, organizations can enhance employee experiences and reduce turnover. Companies do not have to spend resources looking for qualified candidates or performing extensive onboarding. They don’t have to worry that an employee is going to move just for a salary increase. Most employees are looking for more than a paycheck when it comes to job satisfaction. Maintaining a stable workforce provides the consistency organizations need to innovate.

Help the bottom line.

IDR helps a company’s bottom line by:

  • Creating a foundation for workflow automation
  • Decreasing the time from loan origination to closure
  • Improving Customer Service
  • Increasing Productivity
  • Enhancing Employee Experience

For paper-intensive industries such as mortgage or finance, IDR is the first step in digital transformation. Once core documents are digitized for systematic retrieval across the enterprise, automated workflows can be created that better meet buyer expectations for fast loan processing.

The highly regulated mortgage industry has guidelines for every type of loan. Government-backed loans have their own set of rules, as do individual lenders. Keeping current on these guidelines is a challenge. With IDR, documents can be digitized and searchable, letting loan officers quickly find the applicable regulations for a given loan. 

Removing repetitive tasks from loan officers increases their productivity. They spend less time chasing down documents and more time servicing loans. Because technology isn’t interrupted or tire after a 12-hour day, fewer mistakes are made. Loan officers do not have to backtrack to correct errors, adding to the time it takes to process loans. With IDR, discrepancies can be identified early, making loan processing less stressful to buyers and loan officers.