Certain types of automation are increasingly central to most branching strategies these days. This is true not only in terms of managing branches within the company, but also in terms of interactions with external business partners that are part of the loan-making process.
“For anyone that is expanding in the business, technology has got to be a key piece of the strategy,” Jonathan Corr, chief strategy officer at loan origination technology provider Ellie Mae, told this publication.
He said automation is needed for control from a compliance and regulatory standpoint and users are often attracted to variable cost models where they pay on a funded loan basis. With a bit of a rate-driven pickup in refinancing recently contributing to growth but expected to be temporary as such moves generally are in this business, such models allow users to pay on a per-loan basis so their costs are scalable with their business.
Software-as-a-Service models in particular also help companies move quickly and manage rollouts in a cost effective fashion, Corr said.
Technology providers also often offer users an array of tools to make them more productive through, for example, better “statusing” of loans.
“You'll see more and more branches touting that they have those capabilities” whether they are expanding their own “footprints” or acquiring other businesses' footprints, he said.
Such technology allows companies to “better manage their business model, and it's a carrot to attract new folks to join operations.”
Corr said he feels loan origination systems, such as the one Ellie Mae provides, are a “key part of any technology proposition” used in branching.
“It is the system of record,” he said, noting that it should have the ability to manage integrations well and help companies control and cost-effectively deploy functionality to their branches.
“Given the demands placed by the investors and the regulatory and agencies, it becomes more and more attractive for lenders to embrace loan origination providers that can provide other pieces” such as product and pricing capability or compliance, Corr said.
“By having a centralized system you can track when things happen, who opened the file, who closed it, who deleted it, who passed on who commented on it,” said Sanjeev Malaney, CEO of collaborative document services provider Capsilon. “There's a huge accountability and incentive maybe to view what's just happened in your branches, and it can show up cause problems in the funding process.”
Automation also can help provide operating efficiencies with the underwriters and the processors ability to “quickly comment on stips and others things,” he said.
Malaney said branch technology at his company has evolved to handle external business connections as well as with branches that are part of the company.
He said his company started with the initial goal of helping the smaller lender become more operationally efficient with the second phase of its technology used to help lenders collaborate with their branches. The third phase, he said, addresses the question of “How do we get the industry to connect across organizational boundaries?”
