"If you build it, they will come" was an assumption that worked out well in the movie "Field of Dreams," but it's not an assumption we make here at Fannie Mae when delivering technological innovation in the mortgage finance industry. At Fannie Mae, we want to be sure that if we build a product, customers will actually use it.
So, we are asking our customers to help us innovate.
A large part of my job as head of Fannie Mae's Digital Products team is nurturing an internal culture that fosters innovation through collaboration. Increasingly, that cultural change is being driven by close collaboration with our customers and partners, who are working side by side with us as we develop new technology, products and processes.
This shift has led us to "co-create" technology and processes that look to improve the mortgage origination and closing processes so that loans can be underwritten more quickly, less expensively, and more safely.
Co-creation — or the process of pairing the developer of a product with an end user of the product as the product is designed — is nothing new for many industries. But, it has taken on greater importance in housing finance. At Fannie Mae, it has helped us tailor innovation for the mortgage industry's needs as part of our series of Day 1 Certainty initiatives first introduced in October 2016 and updated last fall.
Co-creation has helped us re-engineer not just the underwriting side of lending; it has helped us with streamlining the sale of master servicing rights with our Servicing Marketplace. And, this collaborative spirit helped us understand why introducing application programming interfaces, or APIs as they are better known, for our lender partners was so important. As our partners in the industry take on and process hefty gigs of data, these APIs allow them to better manage data internally and with us.
Our partnerships with lenders mean that they can implement technology that is smart and more user-friendly at a time when the housing finance industry is managing a shift from a market dominated by refinancing to one dominated by purchase lending. Those managing this shift will be lenders that offer the rapid service and response that customers — both millennials and boomers alike — have come to expect from internet retailers, ride-sharing services, and entertainment media experiences that leverage streaming technology. Meanwhile, origination costs in recent years have gone up, so any new process must take away expense, not add to it.
Our efforts to co-create with customers and partners help us do both: deliver a better borrower experience for our customers, and hold down costs.
Co-creation is a change in thinking for us at Fannie Mae. Previously, we would develop a tool for our lender customers and introduce it to the market, expecting they would immediately adopt it and see its benefits. In some cases, the result was a product of little use to our customers — suited more to Fannie Mae's needs than theirs. In today's fast-evolving fintech economy, where participants have to be quick to adopt and adapt to change, this old way of doing business just doesn't work.
Today, we employ agile software development practices to collaborate with our lender partners. Our agile teams in digital products, or squads, are empowered to make decisions that solve problems for customers. The idea is to "put yourself in the shoes" of the customers and then share developments with them through a test-and-learn approach. In some cases, we return to lender customers with updates and check in with them on the progress in the development of a new technology or process every two weeks. Our design thinking methods help our customers derive the right value.
But we at Fannie Mae cannot go about it ourselves. That's where all of our customers in the mortgage lending community come in. The whiteboards here at Fannie Mae are not just for us to have a collaborative work environment. They are here with all of our lender partners at top of mind so everybody can put their mark on them and dream up technology for better customer experience.