Musings from the Digital Mortgage Conference!

In an industry that has no dearth of conferences, the annual Digital Mortgage Conference is an event that I eagerly look forward to attending for the past three years since it was launched. The format of the conference is very slick - quick eight minute demos of new products and solutions, crisp, yet insightful sessions on topics of relevance and great networking opportunities. 

As a trusted partner for many lenders in the mortgage industry, this conference presents a great opportunity for us to keep a finger on the pulse of the market. For the third year in a row, a team of SMEs and practitioners from Cognizant's mortgage practice attended this year's conference in Las Vegas. This year's conference was very interesting in many ways and was a clear reflection of where the industry was headed. We wanted to share our perspectives and takeaways:

•  Ceci n'est pas une POS!!

As a fan of Surrealist art, I couldn’t help drawing a parallel between the Belgian Surrealist painter René Magritte's work "Ceci n'est pas une pipe" (this is not a pipe) and the current state of POS (Point of Sale) platforms. We have been saying for a few years now that the lines between POS and LOS will be increasingly be blurred. The demos in this year's conference year were the most visible evidence of that turn. Almost every single POS vendor was quick to state that "this is not just a POS" and the narratives turned from "enhance borrower experience" to "reduce costs and closing times". With what Raj Menon calls as the "Fattening of the POS" transformation taking place, the role of legacy LOS platforms that do not offer an API-enabled ecosystem will be minimized. POS platforms will increasingly assert themselves as not just an online 1003 portal, but intelligent data processing engines.

•  Groundswell of digital solutions

The trickles of digital solutions across the home buying life cycle have now reached a critical mass. The number of solutions to automate and digitize the process across the life cycle from home search through servicing and default management are at an all-time high. While the past conferences saw one solution being introduced in some of these areas, we noticed that there are now multiple solutions available within the same category. This is great news for the industry as there is an all-out, across the board and frenzied pace of introduction of technology solutions to move away from the legacy business, operating and technology models. This momentum will undoubtedly lead to greater adoption and unshackling of the legacy operating models.

• The "hype pendulum" is settling towards the point of equilibrium

The promise of AI, blockchain and Robotic Process Automation (RPA) was much hyped about in the industry which was also reflected in the conferences in the past. The "Hype Pendulum" for AI, Blockchain and RPA, which swings between skepticism and euphoria appears to have reached a point of equilibrium. The use cases for these technologies discussed and demonstrated in the conference were closer to the point of adoption. Lenders now have some real use cases to consider adopting these into their organizations

•  Data, not docs

The great unshackling of the intelligence locked within the documents in the form of data is finally beginning to take some meaningful shape. With the overall maturity of OCR technologies and machine learning models in classifying, indexing and extracting data from documents, this holds the key to fulfillment efficiency. A number of vendors now have OCR-enabled solutions tailored for this need. The variety of vendors range from doc management to POS platforms with embedded OCR capabilities. While this is good news for the industry to remove the "stare and compare", the sheer variety, breadth, complexity and quality of borrower originated documents will continue to pose a huge challenge. But good early start nonetheless

 In Summary:

The transformation to a digital enabled model is always a "chicken and egg" in any industry and mortgage industry is no different. Technology companies bend the arc of possibility, sometimes bordering on the verge of outlandish ideas to develop technology solutions which may not have immediate use or may be very nascent in their maturity. Clients who have an intent to transform do not match that intent with concrete action, struggling to break out of the legacy business/operating and technology models. The adoption is slow and gradual, but before one realizes, the landscape would have changed dramatically. Mortgage industry is at that critical inflexion point.

 While all these solutions have their own value proposition from their narrow perspectives, lenders who are serious about true digital transformation need to develop a comprehensive vision of what their business, operating and technology models look like. If lenders go about acquiring these solutions implementing them in pockets without an overarching vision, the disillusionment of ROI and a fragmented technology real estate will soon engulf any mortgage bank.

 Exciting times ahead for the industry for sure!

#digitalmortgage #cognizant