Mortgage servicers have seen it all — booms, downturns, recessions and pandemics. Industry leaders will tell you that the key to succeeding in any economy is to know your customer. Closely tracking borrowers’ tendencies and evolving needs is especially important in a down market.
A winning strategy is to combine data-driven insights with customer hyperconnectivity and AI augmentation. This will help you anticipate, understand and positively shape borrower behavior so that you can optimize your portfolio retention in even the toughest economy.
Here’s how to go about it:
Drive Better Customer Outcomes With Data and Analytics
Mortgage originators and servicers can mine a vast reservoir of borrower information for customer insights. That information includes:
Customer profile data
Data from past interactions with borrowers
Real-time data and analytics generated during live interactions with borrowers
Consumer behavioral trends across the industry
The majority of originators and servicers, however, aren’t mining their data as strategically as they could. It’s a costly oversight, since analyzing customer data helps you gauge everything from a borrower’s default propensity to cross-selling opportunities.
Industry leaders that make the most of customer data are reaping the benefits. For example, a top regional bank facing high attrition rates used analytics to predict which customers were likely to prepay their current mortgage, that way the bank could offer borrowers alternatives. Applying advanced machine learning to the bank’s internal borrower data, and then supplementing that with rich external data, the bank was able to generate real-time scores about their borrowers’ propensity to prepay. The result? An improvement of more than 500 basis points in borrower retention.
Augment CX With AI
Volatile economic times require thinking on your feet. Thanks to advances in artificial intelligence, behavioral insights tracked via hundreds of thousands of past borrower interactions can be revised daily to reflect changing conditions. All of this helps humans deliver a better mortgage-servicing experience to other humans.
One way is through agent assist. Powered by AI, agent assist harnesses the latest data and analytics in real time to suggest next best steps while agents interact with customers. In addition to addressing an immediate goal like setting up a new payment plan, agent assist also makes recommendations based on long-term objectives such as maximizing customer lifetime value. Connecting all of these dots within a single customer interaction is powerful.
You can further enhance CX by thoughtfully deploying AI-powered chatbots. Sophisticated speech recognition capabilities and natural language processing let chatbots handle high-volume queries about straightforward matters such as loan payments and escrow balances, reducing customer frustration. Meanwhile, live reps are freed up to handle more complex queries such as questions from high-risk borrowers. Chatbots also free up money: They’re forecast to save the banking industry $7.3 billion globally in operational costs during 2023 alone.
Maintain a 360-Degree View of Your Borrowers
To achieve optimal success through AI augmentation and data analytics, originators and servicers need to meet customers where they are, which is pretty much everywhere these days.
Being everywhere (social media, SMS, email, app, phone, website, etc.) requires excelling at omnichannel engagement 24/7. Surprisingly, just over 10 percent of companies engage seamlessly with customers across channels. A key reason is that an omnichannel approach often amounts to little more than siloed channels. As a result, businesses get a fragmented view of their borrowers’ profiles, and customers end up having a disjointed experience. This leads to higher servicing costs and lower customer satisfaction.
The solution is to integrate all channels within a single platform. Doing so allows businesses to maintain full visibility of borrowers across the mortgage lifecycle, contain the cost of keeping tabs on customers’ loan activities, and continually mine borrower data and behavior for actionable insights.
For instance, by viewing complete borrower profiles on a centralized reporting dashboard, servicers can see which channels borrowers prefer to transact in. With that knowledge, servicers can avoid wasting time and money on communicating through channels borrowers don’t use. A hyperconnected view of your customers also helps prevent redundant requests for sensitive borrower information and multiple transmissions of that data. This alleviates customer frustration, reduces the risk of data breaches, and helps servicers meet regulatory requirements.
Automate Intelligently to Stay on Track
There were more originations in the past three years than during the entire seven years prior to that. While this record volume has been great for topline growth, it can present ongoing operational challenges for companies insufficiently prepared to service an expanded number of loans with speed, ease and accuracy.
Originators and servicers that quickly pivot and scale, however, can readily manage a spike in high-touch servicing. They’re equipped to deal with higher rates of delinquencies in times of rising inflation and can rapidly increase their loss-mitigation efforts as recessionary pressures intensify.
The key to this nimbleness is being able to tap reliable borrower information, and fast. That can be difficult if loan setup details are incorrectly recorded and saved. Such errors result mainly from manual entry and redundant collection, since multiple pieces of source information must be checked and verified against LOS and servicing system data, creating operational bottlenecks and regulatory headaches for servicers.
Intelligent process automation (IPA) can alleviate those problems. What normally would involve substantial time, effort and human fallibility is something IPA can accomplish with economy and precision.
IPA works by combining robotic process automation with AI technologies such as machine learning, optical character recognition, structured data interaction and intelligent document processing. Integrated with operational systems, IPA can transform your loan servicing so that it runs like clockwork, leading to reduced operational spending, better regulatory compliance, and higher customer satisfaction.
To successfully weather the current market and beyond, keep the following tips in mind:
Maximize customer intelligence: By synergizing borrower data, artificial intelligence and hyperconnectivity to obtain full profiles of your customers, you can better predict and steer their behavior.
Augment human insight:Tap technologies like cognitive AI and sentiment analytics to help your agents understand and engage more productively with borrowers.
Reduce complexity: Consider putting an omnichannel platform in the cloud where you can easily add and remove features at minimal cost and effort.
Do more with less: Boost the efficacy and efficiency of your front and back offices with intelligent automation to help drive better CX and more-optimal OpEx.
Want to learn more? Let’s talk. We’d love to hear from you.