By Anil Raibagi – General Manager and Business Head, Wipro Gallagher Solutions
“Paperless” has been the buzzword in the mortgage industry for several years, and yet many financial institutions have still not been able to take advantage of the many benefits offered by this growing trend. If a paperless solution is implemented properly, lenders can find significant advantages in terms of increased productivity and reduced costs. A well-planned transition is not nearly as painful as many hesitant lenders think.
The reasons that might prevent lenders from making the transition include a misconception of the associated costs, inadequate understanding of the transition process and complacency or fear of the unknown. Change is not a choice for the industry. It is inevitable and soon lenders will need to transition to paperless offices just to remain competitive.
There are a number of risks associated with conducting business in a traditional work environment, which uses paper documents. Given the increased focus on protecting customer data, paper environments with files on desks and in unlocked cabinets make it extremely difficult for lenders to ensure the data is safe.
Another challenge includes the management of paper files. When information is not easily indexed and available from a single source, it is nearly impossible to effectively keep track of important data contained in paper files. Also, paper files discourage staff from being truly collaborative. In a traditional paper environment, only one person can work on the file at a time, factoring in days for the documentation to be returned by the appropriate contact to the next, which greatly increases process times and creates unnecessary touch points.
The good news is the transition to a paperless environment is fairly painless when lenders follow certain key best practices. First, all lenders must do a detailed process study, identifying and mapping out all the workflows before and after imaging technology is introduced.
Next, acknowledge up front that there will be some hesitation associated with such a change and get the full backing of the management team. One should avoid scheduling the transition to occur during the end of a month, quarter or year. Proper staff must also be available and engaged during the training and introduction of this streamlined process.
In addition, put control measures in place. One of the most effective is to compare how much paper was being produced before and after the transition. Consider removing or limiting the number of printers on the floor. Removing the crutch encourages operations staff to give the new processes a chance to work.
Once lenders make the commitment to reduce their dependency on paper documents and get through the initial growing pains, they can look forward to innumerable advantages. Besides higher security and ease of access, lending organizations are guaranteed to experience a significant cost reduction. In terms of the delivery aspect, all loan files can now be sent electronically versus delivering them on a courier cost.
Another major bonus is the time savings. Rather than shuffling through multiple tabs in a file to find the right document, this effort is now reduced to a couple of mouse clicks, and documents are easily traced within a centralized location. The collaborative component associated with a paperless system also significantly saves time and improves efficiencies. Multiple production resources can work on the same file without having to wait for a response on certain documentation from each third-party individual, such as underwriters, title agents, real estate agents, appraisers and notaries.
Currently, the technology to run a paperless office exists and the concept is rapidly approaching mainstream acceptance. Many lenders today are looking at new origination systems to meet different business needs ranging from compliance, productivity, reduction in cycle time, centralizing operations along with a paperless office. One must look for a seamless integration of imaging technology in the LOS system and its workflow. Working on a disintegrated system can pose its own challenges and can make the whole process unfriendly for users.
Up until now, lenders could still get away with relying on manual processes, but the introduction of the electronic loan file is a necessity to remain competitive in this constantly evolving industry.
Anil Raibagi is the general manager and business head at Wipro Gallagher Solutions, which provides cost-effective, end-to-end loan origination technology and fulfillment services to financial institutions. WGS lending technology and fulfillment processing solutions support paperless environments and enable users to reduce costs and streamline workflows and business practices. For more information, visit the company’s Web site at www.gogallagher.com.