Managing residential mortgages, the process of collecting your mortgage payments and passing the right amounts on to investors, tax authorities and insurers, is probably not the first area you would consider a hotbed of digital transformation.
After your mortgage is closed, the mortgage manager is your point of contact for everything related to your mortgage repayment. For most of us, this is where the payments go until the management rights are perhaps sold to a third party service company like Select Portfolio Servicing, Inc. (SPS). We then go through the process of changing mailing addresses and account numbers. Other aspects of the loan service, such as bankruptcy, foreclosure, property taxes and insurance, repayments and dispute resolution, are also part of the manager’s responsibility.
This story is about SPS, a leader in the residential mortgage services industry, a wholly-owned subsidiary of Credit Suisse Group, AG.
I met Jay Nair, senior vice president of financial services at Infosys. He says this example had two essential ingredients for digital success – the first being a visionary leader in Randhir Gandhi, CEO of SPS, who is dedicated to dramatically improving customer experience and operational efficiency. A trusted partner from Infosys, a leader in next-generation digital services and consulting, is also required to help you navigate the digital transformation.
The story Mr. Gandhi of SPS told me is an impressive one and I hope it inspires your digital transformation journey, no matter what industry you are in.
Improve the customer experience
SPS and Infosys have collaborated to digitally transform the paper-intensive mortgage services industry. SPS improves the customer experience by translating documents into data points and data points into actionable information.
Using artificial intelligence (AI), machine learning (ML) and natural language processing (NLP) on petabytes of data created with every customer touchpoint through various channels, be it the mobile app , written correspondence, website, phone calls, and then gathering and correlating these data points improves the customer experience.
In addition to improving the customer experience, businesses are likely to find other benefits during the digital transformation process, including reduced costs and risks associated with manual processes, compliance and oversight.
The Infosys relationship
Choosing a technology partner is an important decision. If you embark on the journey without a trusted partner who can deliver results, life becomes exponentially more difficult. Most businesses need to focus on their core business. Technology will be an integral part of success, but it can’t be the core business, so you need a partner to get results.
SPS chose Infosys for several reasons:
- A 17-year relationship with high-level managerial support
- Infosys brings to the table a cloud ecosystem (Infosys Cobalt) that includes world-class partners such as Microsoft and the ability to deploy people with Azure expertise
- Most importantly, a performance record, because all of this means nothing unless it can translate into results.
- Global footprint providing 24/7 critical support
Infosys Mortgage Solutions, part of Infosys Cobalt, encompasses business process automation solutions for the mortgage industry, with a focus on document-centric processes that are manual and labor intensive. These solutions are based on open source and use cutting edge techniques such as computer vision, NLP and machine learning, including correlation, predictive analysis and classification. Infosys Cobalt is a set of services, solutions and platforms that enable companies to accelerate the transition to the cloud. It offers 14,000 cloud assets and over 200 industry cloud solution plans.
Data on paper
SPS serves over one million US customers, with over 1,200 data points per customer!
All data points must be validated and matched with the documentation that accompanies each loan. In collaboration with Infosys, a document repository was created on the basis of a private cloud using Microsoft Azure.
Data files are fed by ingesting documents in real time. Exceptions are flagged for SPS associates to take action. Documents, especially exclusive written correspondence and loss mitigation documents, are not consistent in this industry.
The translation of PDF documents into data is achieved using optical character recognition (OCR). However, in many cases it can be a copy of a fax that is virtually unreadable by OCR, where artificial intelligence (AI) algorithms as well as machine learning (ML) and natural language processing (NLP) are the solution.
SPS worked with Infosys to produce unique NLP and AI algorithms to address this problem. The result is that SPS knows from an accuracy standpoint that the data is solid.
By leveraging this technology platform, SPS has effectively achieved significant growth in its portfolio without sacrificing its commitment to absolute compliance, while improving the customer experience.
From a customer experience perspective, SPS can ingest massive amounts of data-intensive documents and make that data immediately usable by customer service agents. This reduced the service transfer time for customers by over 95%, creating a unique and seamless service transfer experience.
A 360-degree view of the customer
Once SPS saw the success of the first project, the next element was to add data from other sources.
SPS sends millions of letters and makes millions of calls every month. Other customer touchpoints include the mobile app and website. Like many businesses that have grown organically, data resides in various back-end databases.
SPS worked with Infosys to create a dashboard on top of this huge data repository. SPS has visibility into app logs, website clicks, every incoming or outgoing phone call, every document sent to the client or sent by the client to SPS.
Equally important, SPS has customer payment behavior, customer questions, and customer disputes. With AI algorithms, SPS created a 360-degree customer view. With insight into customer behavior and what might happen next, SPS can now proactively respond and provide the customer with options designed to achieve the best possible outcome. If the customer is still not fully on track, SPS identifies these outliers and management can intervene if necessary.
It is now possible to grade each loan and identify those in a high risk category, with action items explaining why the system thinks the customer will call and for what reasons.
It is simply breathtaking from the customer’s point of view, and the response has been positive. Customer service agents and customers are completely in sync from the start of the call as the system has already prepared agents with the information customers will ask for and provided the best possible options to resolve each customer’s situation. This has resulted in improved customer satisfaction scores across the board, reduced repeat calls and increased confidence for customer service agents who can quickly develop a relationship with customers by providing solutions tailored to their needs.
It would be impossible without using AI technology and tools to turn data into usable information.
The Texas Freeze of 2021
SPS worked with key partners and an insurance company to access separately hosted data through real-time APIs, giving SPS visibility into insurance claims and customer activity due to the disaster, improving thus the prediction algorithm.
If a customer called the insurance company or SPS, the response would be consistent.
This resulted in a reduction in the time for clients to receive insurance claims, which allowed them to get their lives back in order quickly after this devastating event.
SPS uses digital technologies to fundamentally transform the mortgage services value chain. It transformed archaic paper-based processes to reduce costs and improve scalability while remaining 100% committed to unwavering compliance standards while dramatically improving the customer experience.
Driving operational efficiency and ensuring compliance with compliance standards while reducing costs and time through digital document management is certainly not the domain of the mortgage services industry alone. Techniques such as using ML-based document classification to identify the right types and versions of documents, extracting relevant data from multiple document types using OCR and NLP can undoubtedly be applied to other sectors.
Note: The editors and editors of Moor Insights & Strategy may have contributed to this article.
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