May 30, 2023
QA Automation - Enhancing The Digital Mortgage Landscape
Over the years, the mortgage industry has witnessed a significant boom. Even though the growth curve involved various challenges, the potential which available opportunities carried have made the mortgage firms fly.
However, there is still a need for a reimagined and reshaped lending ecosystem called Digital Mortgage, which comes from the growing user interaction with technology and need for streamlining and improving the mortgage processes.
But What Is Digital Mortgage?
A digital mortgage is the process of applying for and obtaining a mortgage loan entirely online, without the need for physical paperwork or in-person meetings.
From improving the experience of borrowers to reducing the loan processing time and facilitating the operational efficiency & transparency of the mortgage systems, the digital mortgage has set the mortgage industry for a dynamic digital transformation.
Thus, it becomes important to understand what potential the digital mortgage landscape carries and how technologies like test automation could help call transformation. But how do tech transformation and mortgage landscape align?
In the next few minutes, we will dive through some detailed insights on why digital transformation is crucial to the success of the mortgage industry and how QA could intervene to help brighten the future.
Tech Transformation & Mortgage Landscape
Traditionally, a mortgage process used to take 46 days of time to complete, costing the lending institution an average of $2250 per loan. Besides, the traditional approach turned out to be lengthy and less reliable with most of the process done through paper-based transactions. Going through more than 30 touchpoints and interactions, the traditional approach causes unpredictable delays, added costs, inefficiency, and bad customer experience.
Thus, when it comes to accommodating new technology into an industry that traditionally involved no use of software or applications, it requires a front-to-back assessment of the process. Therefore, it is vital to integrate modern technology into the traditional operations within a mortgage process in order to yield improved customer experience and greater lifetime value.
Here are a few ways how technology works as an advantage to lending operations:
- Customer Acquisition
Since the traditional approach of using Excel data for customer records and returns was incapable of giving comprehensive results, moving towards advanced technology was essential. With access to lending and mortgage management software, lending companies could now check on all the significant events and history of the customers. Be it the mortgage firms walking through the borrower’s journey or enabling a customer to explore financial products, technology infuses confidence in both ways.
- Origination Documentation & Review
To find quality lenders, it is crucial to review the income and identification documents. Since the manual process is likely to witness errors or frauds, the digital data shared across applications simplifies the review process and adds accuracy.
- Underwriting
It is the most time-consuming part of the entire lending process. Underwriting needs to locate all the missing data and filter all the incorrect details related to a borrower. Even though the use of technology does not cut any tasks involved in the underwriting process, it enables faster risk assessment at the lender’s end while simplifying the underwriter’s job for future loan applications by the same borrower.
- Customer Support (including Engagement, Retention, Refinance)
If we move back to the time before the pandemic, mortgage companies were never so bothered about refinance. However, the pandemic led to a massive increase in refinance applications which made mortgage companies accommodate all the loan portfolios to sustain their customers moving to the competitors. Thus, technology in the mortgage business confirms the retention value and improved customer support.
Need To Strengthen Your Digital Impression For Your Real Estate Firm?
Read Our Checklist To Testing A Powerful & High-Performing Real-estate App.
How Traditional Mortgage Is Different From Digital Mortgage?
Adopting digital technologies streamlines and automates various processes involved in mortgage operations. It reduces manual paperwork, eliminates repetitive tasks, and enhances the overall efficiency of the mortgage lending process. This leads to faster loan origination, quicker approvals, and shorter turnaround times. Besides, there are many significant reasons that make digital transformation in the mortgage sector a need of the hour:
1. Enhanced Customer Experience: Digital transformation enables lenders to provide a more seamless and convenient experience to borrowers. Online applications, document uploads, and electronic signatures simplify the application process, making it faster and more accessible. Additionally, digital platforms can offer personalized recommendations, real-time updates, and self-service options, empowering customers and improving satisfaction levels.
2. Cost Reduction: Traditional mortgage processes often involve substantial paperwork, manual data entry, and extensive physical documentation. By digitizing these processes, lenders can significantly reduce administrative costs associated with paper handling, storage, and transportation. Automation and data analytics also enable lenders to identify areas for cost optimization and operational efficiency.
3. Risk Management: Digital transformation in the mortgage industry enhances risk management capabilities. Advanced data analytics and machine learning algorithms can analyze vast amounts of data to identify potential risks, detect fraud patterns, and assess creditworthiness more accurately. This helps lenders make informed decisions and mitigate risks associated with lending.
4. Compliance and Regulation: The mortgage industry is subject to numerous regulations and compliance requirements. Digital transformation allows lenders to automate compliance processes, ensure adherence to regulatory standards, and maintain accurate records. This reduces the risk of non-compliance, penalties, and reputational damage.
5. Data-Driven Insights for Marketing and Business: The adoption of digital technologies enables lenders to collect and analyze large volumes of data. By leveraging data analytics, lenders can gain valuable insights into customer behavior, market trends, and risk assessment. These insights help in making data-driven decisions, developing targeted marketing strategies, and improving overall business performance.
6. Competitive Advantage: Digital transformation is rapidly reshaping the mortgage industry. Lenders who embrace digital technologies gain a competitive edge by delivering faster, more efficient services, and providing an enhanced customer experience. Digital-savvy lenders can attract new customers, retain existing ones, and differentiate themselves from their competitors.
How Quality Assurance Could Help Digital Transformation In Mortgage Sector?
By incorporating quality assurance practices, mortgage lenders can achieve the desired outcomes from their digital initiatives and drive long-term success.
- Testing and Validation: Quality assurance teams conduct thorough testing and validation of digital platforms, applications, and software solutions before their deployment. As far as finance app testing is concerned, it usually includes functional testing, usability testing, performance testing, security testing, and compatibility testing across various devices and platforms. By identifying and resolving any issues or bugs early on, quality assurance ensures that the digital solutions are reliable, robust, and meet the needs of both lenders and borrowers.
- User Experience Optimization: Quality assurance teams focus on optimizing the user experience (UX) of digital solutions in the mortgage sector. They analyze user feedback, conduct usability tests, and ensure that the user interfaces are intuitive, easy to navigate, and provide a seamless experience for borrowers throughout the mortgage process. This enhances customer satisfaction, reduces friction, and increases adoption rates.
- Compliance and Security: Quality assurance ensures that digital solutions in the mortgage sector comply with industry regulations, data protection laws, and security standards. They verify that personal and financial data is handled securely, encryption protocols are implemented, and access controls are in place to protect sensitive information. By conducting rigorous security testing, quality assurance helps identify vulnerabilities and mitigate risks related to data breaches, fraud, and unauthorized access.
- Data Accuracy and Integrity: Digital transformation involves handling and processing large volumes of data. Quality assurance teams validate data accuracy, integrity, and consistency across various systems and integration points. This ensures that accurate and reliable information is available for decision-making, reporting, and compliance purposes.
- Process Optimization: Quality assurance professionals collaborate with stakeholders to identify process inefficiencies and bottlenecks in the mortgage sector. They analyze workflows, identify pain points, and suggest improvements or automation opportunities. By streamlining processes, eliminating manual errors, and improving data flow, quality assurance supports operational efficiency and enhances the overall digital transformation journey.
- Continuous Monitoring and Support: Quality assurance is an ongoing process that involves continuous monitoring of digital solutions and post-deployment support. By monitoring system performance, analyzing user feedback, and addressing issues in a timely manner, quality assurance teams ensure that the digital solutions remain effective and aligned with evolving business needs.
Conclusion
With the evolution of the FinTech industry and the growing needs of borrowers across the world, the mortgage industry has quickly followed the route to technology. From overcoming the risks of the quality of loans for customers to aligning with the regulatory requirements, digital transformation for the mortgage sector opens more opportunities for both lenders and borrowers.
Since the present situation showcases a thin line of profit margin to the small or medium-sized lending firms, taming the fintech giants needs mortgage firms to adopt technology at a faster pace. Doing so could not only help in minimizing the operating costs but can even strengthen the margins. Besides, delivering a premium user experience has become a mandate for mortgage firms aiming to gain lifetime customer value.
If you too are a mortgage firm planning to take on the opportunity with effective risk management and improved customer targeting, we at BugRaptors could help you leverage digital solutions with comprehensive mortgage domain testing. Connect with our team to make your way to digital transformation with the best of quality engineering and quality assurance services.
