The following is an excerpt from the November edition of Mortgage Technology magazine. To read the full story and much more,
Are the challenges of a difficult market bringing business intelligence technology to the fore in mortgage lending?
Many think of BI software as an enterprise-level tool for mega-lenders to look for problems and extract more efficiency from their legacy systems.
PNC Bank’s mortgage technology functionality, for example, is supported by business intelligence and reporting initiatives with technology from two vendors, Informatica and Oracle’s Business Intelligence Enterprise Edition and database technologies.
BI aimed exclusively at the mortgage lending vertical is relatively new, introduced in recent years by companies like Intelli-Mine. But these vendors have struggled to price their offerings to deliver verifiable and replicable returns on investment for any but the largest lenders.
These days, there is nothing arcane about business intelligence technology. Creating BI tools can be done with Excel and a Web browser. The most familiar BI tools are dashboards and scorecards. A fully featured BI system includes ad hoc query and analysis and predictive analytics.
Given that lenders face a compliance requirement to track, time-stamp, document and archive every step in the origination and processing of a mortgage — and do it all as efficiently and cheaply as possible — it would stand to reason that business intelligence is the hottest product in mortgage technology today. It isn’t.
One adoption hurdle is that many lenders think of a necessary “return to basics” in underwriting and processing means a retreat from technology and innovation. Another is that the regulatory climate is so complex that lenders are reluctant to put all their compliance eggs in any technology basket they don’t already use.
Moreover, the collapse of so many of the subprime lenders that boasted leading-edge technology has created what many see as healthy skepticism about the value of mortgage technology, including BI.
“It’s not so much about the technology,” said Ellie Mae’s Jonathan Corr. Rather, he said. “The question is whether lenders run their businesses in a heads-up manner to avoid buybacks, unnecessary costs and regulatory infractions.”
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