bankingciooutlook

The Prospect of Mortgage Technology

Banking CIO Outlook | Monday, August 08, 2022

Banks can use mortgage technology to classify financial documents, capture critical data fields, find fraud, and analyze cash flows. This makes mortgage loan processing faster and more data-driven.

FREMONT, CA: Analysts pondered how many industries would adjust to the new "work-from-home" reality at the outset of the Covid-19 pandemic. Over the past five years, people who had been a part of the technological revolution in banking were not surprised to see corporations successfully transitioning staff to remote work and relying on automation more and more. This was especially significant for industries that had historically been sluggish to adopt new technologies, such as banks and mortgage companies.

The Increase In Cybercrime And Fraud

The Biden Administration has issued an executive order to strengthen the nation's cyber infrastructure. Still, the growing threat of cyberattacks continues to challenge the banking industry and consumers. The FBI announced that Internet Crime Complaint Center (IC3) complaints skyrocketed last year. It took seven years for the first million complaints to be filed, but over a million have been filed in the past 14 months alone; the total number of complaints is now six million.

Everyone who watches, stores, or handles sensitive financial consumer data should be concerned about this statistic. Additionally, cybercrimes went unreported because corporations did not wish to publicize that they had been targeted. As business processes and data have become increasingly automated and digital, companies have become more susceptible to these attacks. These breaches are difficult enough, but the mortgage business must also contend with a surge of mortgage and title/wire fraud.

Fraudsters are targeting new e-closing software and automated processes to commit title/wire fraud on the back end of the loan process in 2021, putting consumers' hard-earned down payments at risk. This does not imply a return to paper, but rather that the financial services industry must commit more time, effort, and resources to strengthen their processes, closely monitoring new vendor partners and continually testing their systems for vulnerabilities. Technology is driving a new era of consumer-centric processes and experiences; nevertheless, we must ensure its basis is sound.

The Impact Of Automation/AI On Efforts To Promote Diversity, Equity, And Inclusion

The industry's growing commitment to diversity, equity, and inclusion may be the only thing that can top the significant technological advancements and consumer experience in recent years. Nearly every major bank now employs full-time personnel to address this issue. In addition, corporations virtually commonly use automated underwriting tools and AI decision-making systems to analyze creditworthiness. In theory, each consumer is treated equally and without bias. However, other proponents contend that banks' data and characteristics to determine a borrower's creditworthiness may be prejudiced. Lenders must reevaluate the criteria used to determine creditworthiness and ensure that every opportunity is used to increase credit responsibly and enable more people to fulfill the American dream of homeownership.

Innovation must be appropriate; else, there is a serious danger of undermining vital consumer protections. The banking sector must continue robust surveillance, oversight, and enforcement as a community of lenders, regulators, and consumers. In addition, AI might generate grave bias concerns if it is not controlled and implemented appropriately. As long as banks remember that the industry, the provision of homeownership, is ultimately a "people" business, they will be able to safeguard consumers and their resources.

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