As we approach 2020 and budgets become finalized, one
uniting theme among mortgage companies appears to be the quest for digital
supremacy. What this means is subject to
debate. For most mortgage organizations, digital supremacy means an online
end-to-end mortgage experience for the consumer. For others, it means utilizing
data between systems to streamline operations.
In 2020, it is anticipated that the biggest trend and
biggest knowledge/expertise gap for most mortgage companies will center around
doing more with data to achieve the sacred goal of digital supremacy. The
realization that digital is the default landscape of the mortgage business has
reached a consensus, whereas even a few years ago, many mortgage companies were
more than a bit dismissive about the need for a digital-first strategy; some
even claiming that a true “personal relationship” could not be built in the
Still, many executives remain hesitant to invest deeply in
digital transformations and initiatives. This hesitancy may be due, at least in
part, to a lack of knowledge regarding the expertise needed to develop and
execute digital initiatives.
Recent research from the Harvard Business Review (1) shows
that revenue and earnings growth are largely negative for companies that
neglect digital innovation. How can mortgage companies ensure that they get
digital right? Among the first orders of business in this ongoing journey is to
understand the data ecosystem which underpins your organization—to establish
context. Data is the key, as this is the lifeblood of all the existing systems
running the business. Optimization and innovation can then proceed, followed by
proper management and leveraging of digital resources.
Understanding the ecosystem
Having a defined future state starts with fully
understanding the current state. This can be a daunting task, especially for
experienced professionals that have been in business for many years. It should
frighten more executives that a full rationalization of existing systems, services,
and products has not taken place. Besides the drain on efficiency and costs,
opaque ecosystems are the breeding ground for cybersecurity threats.
For instance, at the 2020 Annual MBA Conference in Austin,
Texas, a panel of experts discussed details of recent ransomware attacks (2).
The panel agreed that traditional firewalls are not enough to protect companies
from attacks. Authorities expect that attacks will increase and possibly double
in the next year, as they did from 2017 to 2018.
Security and compliance are just two prongs of an effective digital strategy. While both are too commonly overlooked, a failure to consider either or both will have serious ramifications for the organization. No digital platform can be considered trustworthy without the ability to answer the “who, what, where, and why” questions about the totality of an organization’s electronic data. With consumer privacy coming to the forefront and new privacy regulations (like CCPA) top of mind, it’s more important than ever to know where your data lives.
Once a coherent understanding of the existing data ecosystem
is achieved, the focus can shift to developing an effective and efficient
future ecosystem. While the roadmap to an ideal future ecosystem may differ for
organizations based on their level of complexity and maturity, all
organizations will need to assess what systems and processes exist, which ones
need to be terminated, and which ones will continue to be a part of the digital
Optimizing and innovating
Reviewing current trends, technology landscape, and new
practices are key components in formulating the best future state for any
organization. Naturally, enterprise constraints play a big role in determining
feasible strategies. Budgets, investors, and stakeholders will greatly
influence potential execution pathways.
This critical juncture is where decisions between
off-the-shelf vs. build-your-own solutions are made. Organizations will need to
navigate through an array of potential consultants, products and vendors. Crucial
in this step is clearly defining the future state, to ensure alignment between
business units, channels, and stakeholders. Additionally, a business-first
mentality is needed to safeguard against superfluous technology initiatives.
Furthermore, data availability and aggregation capabilities
need to be addressed. Successful completion of these preliminary steps is a
prerequisite for effective automation and analytics. It also sets the stage for
truly innovative practices to materialize, including artificial intelligence
and machine learning.
Another often neglected area is process optimization.
Process review and improvement is a big part of an effective optimization
campaign. New technologies lend themselves to improved processes and therefore
require a thorough review to ensure the best processes are being optimized. An
effective review needs process improvement specialists – including Six Sigma
certified experts – to lead these exercises.
Manage and leverage
While there may be intermittent peaks and plateaus on the
digital journey, the climb to digital supremacy should be viewed as a steady,
gradual march up a mountain. Only the pinnacle of that mountain remains just
out of sight.
As a coherent strategy begins to form, a robust management
process must be created to leverage the potential of the digital ecosystem.
Building and implementation must be followed by a full extraction of value from
Too often we see clients who do not fully leverage the
potential of their systems and technology. The same level of emphasis placed on
planning and implementing a solution should also be placed on the people and
processes running the solution. Thus, a plan to ensure adoption and to nurture
new behaviors must also be implemented to fully leverage new capabilities.
Digital capabilities within an organization usually require
skilled resources to deliver value, so finding the right people is critical.
Utilizing knowledgeable consultants can be one way of leveraging new digital
capabilities while quickly ramping up the level of competency across the
2020 will certainly provide its fair share of surprises.
Interest rates will always remain unpredictable—recall the consensus going into
2019 was higher rates. However, one known factor is that as the race towards
digital supremacy continues to unfold, companies embracing a coherent strategy
will pull ahead.
Creating a clearly defined, yet agile, roadmap is the key to
driving successful digital initiatives. By ensuring a clear understanding of
your organization’s digital and data ecosystem before innovating and
optimizing, you create a solid foundation to build upon when managing and
leveraging new capabilities.
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