Total loan production costs, including commissions, compensation, occupancy, equipment and other expenses and allocations, rose to $7,000 per loan, according to HousingWire Magazine. Time is money in every line of business, but the very intensive processes, details and regulatory scrutiny of the mortgage industry can make it all too easy for a bank’s bottom line to get bogged down.

In loan onboarding, the big problem for banks is that the multiple systems involved don’t interface with each other:

  • loan application (i.e., entering of customer information)
  • decision-making (e.g., credit check phase, loan approval)
  • documentation
  • loan onboarding into the core banking system

With some setups, there may be an interface between the above systems, but it usually doesn’t convey 100 percent of the loan data. Do you think the originations manager, head of underwriting or any eagle-eyed regulators are OK with less than complete loan information? Not a chance.
When those structures aren’t streamlined and can’t communicate with each other, your bank’s onboarding process becomes manual and thus very labor-intensive and costly. Did you know the tab for hiring and employing a single data entry worker could run up to $57,725 according to the U.S. Bureau of Labor Statistics and the Center for American Progress?

Harnessing Rich Data

Robotic Process Automation (RPA) software allows bank personnel to enter the loan data one time via spreadsheet, capture all the information in one fell swoop, and then send the data into three different applications and fully automate the process. This is not simply about speeding up the conveyor belt; RPA software is systematizing and upgrading a process involving hundreds of data points and multiple entry points.

The key is that there is rich data in these applications. However, once you have the data, it must be extracted, read and analyzed so a loan officer can make a decision on the loan. Once all the documents are printed out, probably 98 percent of it has to be rekeyed into the core banking system where all of the accounting processes take place, such as the interest rates and accruals.

RPA software is an automated employee that copies, moves and pastes information just like a non-techie data entry person would, but at a rate of six times faster. It helps the onboarding team through a virtual elimination of data processing errors and a major reduction in the time to run the platform. RPA software brings the same powerful advantages to loan portfolio conversions as well. When it comes to a single purchase or on-going purchase of loan portfolios, this data automation tool can gather all the data from each portfolio and send it into as many applications as needed to fully automate those mundane processes.

A mission-critical industry like mortgage banking involving vast and valuable information and crucial processes demands performance and reliability. With ease of use that belies its enormous operational value, RPA software can elevate a bank’s integral loan onboarding platform in every category – speed, accuracy and economy.

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