WE’RE HEARING that the development of “smart process applications” may revolutionize the way lenders interact with their customers.
At least that’s the hope of California-based technology provider Kofax, which unveiled its TotalAgility 7.0 SPA platform last week. The company said it invested $125 million in the development of the SPA platform, which is designed to support interaction with consumers that is people-intensive, collaborative, loosely structured and subject to change.
In a world cluttered with technology acronyms and abbreviations, SPA will have to muscle its way into the space already occupied by terms like CRM, (customer relationship management), BPM (business process management) and DCM (dynamic case management). But executives at Kofax believe their SPA approach opens the door for vast improvements in the “first mile” of customer interaction, when a first impression of the company is at stake. Kofax’s TotalAgility platform seeks to unify many of the customer facing applications that are linked to a lender’s system of record.
Chris Edgington, director of solutions marketing at Kofax, told me that Kofax already has had a lot of success in selling its traditional data capture and integration service to the mortgage industry, estimating that Kofax’s technology helps to process between 18% and 25% of the mortgage origination market. In September, the company announced that its technology was being used to capture and convert data for more than 1.1 million annual home loan applications.
The SPA platform seeks to drive the data capture and integration process deeper into the sphere of business process management, making it smoother and easier for consumers to navigate in a self-service world. An increasing number of consumers are using mobile devices to initiate loan applications, and that mobility is increasing the opportunity to reduce friction or bottlenecks through SPA technology, according to Kofax.
Edgington notes that the Mortgage Bankers Association estimates that personnel costs account for 57% of the cost of originating a home loan.
“It’s a very document-driven process. In any given loan file there can be up to 300 document types, so loan files can get complicated pretty quickly.”
Edgington said mortgage originators ask potential customers to provide the most sensitive financial information they have, including Social Security numbers and tax return data. Traditionally, all this information came in via disparate sources such as fax machines, personal delivery to branch offices and snail mail. It was an error-prone process that had a lot of information flowing into what sometimes seemed like a black hole, he said.
“Anytime you have a lot of data entry, you have a lot of errors,” he added.
In turn, lenders had to spend a lot of time auditing and re-auditing loan files, double checking all the data. SPA technology can help alleviate this effort by making sure things are done right at the beginning. That development of SPA software can provide a link between a lender’s traditional core operating system and its front-end interaction with customers, providing flexibility and adaptability that might not be available directly from a bank’s core technology platform.
“It’s an ever changing regulatory environment, so you have to have a pretty agile process in place with a pretty consistent way of applying that process,” Edgington said.
Kofax is also involved in the servicing side of the business. Earlier this year, Kofax announced that a major subservicer had invested $1 million in its technology. Anthony Macciola, CTO at Kofax, told me that the subservicer acquires loans on the open market after origination, so they have to reintegrate the loan files onto their servicing platform. The company’s goal is to capture data from imaged documents in a more efficient and automated way. The company is looking for technology that will help them capture the information with no rekeying of data.
“Our ability is to effectively capture a wide range of different types of documents in a real world operating environment,” Macciola said.
Capturing data is often the first challenge clients face. He said that “total agility” involves wrapping an orchestration underneath the data capture process to initiate workflow and improve the customer experience. The goal is to facilitate the collaborative and conversational kinds of communications with consumers that are facilitated by mobility.
“It’s tightly integrated a variety of technologies that are needed to create smart process applications,” Macciola said.
He believes “the first mile” of consumer interaction with a lender can be greatly improved with SPA development that extends the lender’s technology system of record into that collaborative and conversational environment.
Edgington said consumers are driving up expectations for a smoother and easier “first mile” experience in their mortgage transactions.
“Customers are demanding more immediate interaction. They are even moving away from traditional online sessions to doing everything on the phone.”
Ted Cornwell has covered the mortgage markets since 1990. He is a former editor of both Mortgage Servicing News and Mortgage Technology.