The FinTech industry is experiencing significant growth in the use of Artificial Intelligence (AI). While AI and Machine Learning (ML) are already quite popular in banking, credit card and auto loan niches, the mortgage industry has just started reaping its benefits. In the next couple of years, particularly after the Covid-19 pandemic, we will experience an overwhelming presence of AI-based automation in likely every aspect of mortgage processing. In fact, it will become a common practice very soon.
Let's understand the benefits of Artificial Intelligence from the perspective of lenders so you can decide how important it is for you to implement this technology in your company.
Assessing the credibility of an applicant
The primary and most important factor for any lender happens to be the assessment of the applicant. Whether you are providing a small loan or a large one, it is crucial to determine your potential client's creditworthiness.
Nowadays, lenders cannot just rely on credit histories presented by previous companies. In fact, they need to get into the personal lives of applicants and evaluate the nature of their social media posts, browsing activities and several other aspects. This is where AI can play a pivotal role and keep you safe from being frauded.
For all business owners, and particularly for lenders, it is crucial to optimize their expenditures. However, if they keep running manual or obsolete technologies, the operational costs would continue to increase every year.
This is yet another area in which AI-based tools allow you to automate end-to-end loan processing. As a result, you will be able to evaluate a significantly higher amount of applications in a quarter and reduce your costs on labour as well.
Making the overall process more efficient
As a lender, you would already know that mortgage processing is a tedious task, and the most delicate aspect happens to be underwriting – it consumes more time. It requires much more attention than any other stage.
If you do underwriting manually, a backlog will likely occur, using enormous amounts of time better spent on your clientele.
Contrary to this, if you deploy an AI-based system that takes care of all stages using minimal configuration, you would make everything more efficient!
As a result, your burden will be minimized and your customers will be happy, hopefully referring you more business in the industry.
Apart from all of the positive points of using AI in mortgage processing mentioned above, you can also use it to identify the customers who are most likely to buy your services or products. Therefore, instead of targeting the wrong audience, you can optimize your marketing campaigns and get a higher Return on Investment. This, in turn, might even reduce your processing time in the future, as you would already have gathered information about your customers beforehand.