For a very long time, the mortgage industry in the United Kingdom (UK) has remained about the same. Banks and financial institutions are often overwhelmed by the huge number of loan applications that arrive on a regular basis.
With the process of loan creation the same and the demand for loans increasing rapidly, UK lenders are embracing digital transformation.
Due to numerous obstacles, customer relationship management and customer satisfaction are also taking an unprecedented number of blows! Therefore, there is an urgent need for a technological transformation that enables a smooth digital transformation while being innovative enough to solve all modern loan origination problems in the blink of an eye.
Fortunately, with the rise of Artificial intelligence (AI) technology and machine learning (ML) algorithms, all of that will change. The UK mortgage industry is poised for the long-awaited disruption, and Digilytics stands to gain in innovation.
This article further explains the issues facing today’s mortgage industry and how artificial intelligence can add value to lender tables.
Highlight tThe challenges facing lenders in the mortgage industry
With growing demand for mortgages and the lack of innovative process disruptors in the market, lenders’ profits are dwindling.
The repercussions of these challenges also include a significant drop in mortgage liabilities. According to bank of england, the decrease was more than 50% in 2020 compared to 2019!
Some of the challenges that can be highlighted in the current scenario are:
- High cost of loan creation
For any mortgage lender, creating a loan is a critical first step. With rapid globalization, market fluctuations and changes in policy, banks are finding it difficult to manage the fluidity of the environment in which they operate.
Therefore, the lack of digital transformation of LOS increases manual processes which, in turn, increases costs. Currently, the average mortgage creation the cost is 4000 pounds per loan!
- Lack of transparency
As the cost of the loan granting process increases, it becomes more and more difficult for lenders to be transparent in their processes. In contrast, borrowers demand the highest degree of transparency. Therefore, balancing transparency and customer satisfaction becomes a difficult task for banks and other financial institutions.
- Ineffective loan approval processes
The increased bifurcations in the loan granting process, combined with the increased volume of loan applications, results in an inefficient overall process that costs lenders a lot of time and money.
- Lack of coordination between stakeholders
Industry regulations are becoming stricter than ever to ensure the security of assets and deter cases of fraud and theft, making the compliance process increasingly complex and increasing underwriting paperwork.
In the midst of all the chaos, coordination among stakeholders is disrupted and adds to the delays. Such delays can easily extend the process for more than two weeks!
The UK Mortgage Guarantee Scheme
The COVID-19 pandemic has contributed to a substantial drop in UK public confidence in housing. The decline was most significant in the first quarter of 2020 according to IMLA.
Therefore, the UK government announced on March 3, 2021 a new program to boost the housing market by helping the public to own a home.
To buy a property, individuals must deposit an amount in advance. The collapse of the economy in 2020 has led more people to struggle for an income. Unlike many of the previous UK mortgage programs, the 2021 mortgage guarantee scheme is also applicable to existing homes in addition to new homes.
The guidelines for the new program have reduced the amount of the deposit for people looking to buy a new home to as low as 5%. This means that the borrower can take out a loan worth up to 95% of the value of the property, provided the value does not exceed 600,000 pounds!
Innovative UK mortgage application and approval using AI
The current mortgage approval and delivery process can be broken down into five stages:
- Apply for the loan
- Loan processing
- The subscription process
- Closing of the transaction
- Provide all relevant documents
The first three are very critical as there is a lot of room for error and, therefore, a lot of potential for unprecedented delays. Also, having a paper workflow to review all the relevant forms and documents is rather tedious. To top it off, a manual system increases the chances of human error and more delays.
So how can we get around this problem?
Use of AI and ML-based technology in the lending process, financial institutions could eliminate the complexity of the processes, reduce the reliance on manual labor for paperwork and minimize the risk of error.
Digilytics RevEl concentrates the awkward loan and finance application process into 4 simple, fully digital processes, after which you receive your funds. The stages are:
- Digital submission of documents
- Automated data capture, review and validation
- Processing of offers
Additionally, RevEl also allows the lender to track cases in real time with critical alerts and notifications.
RevEl innovates mortgage in the United Kingdom by;
- cut subscription time by almost half,
- reduce the financing time by 3 times,
- and increase the number of disbursed loans by 25%!
Digilytics RevEl’s OBVIAX Framework is the secret sauce behind innovating and accelerating the UK mortgage process.
One-Shot Learning Technology
RevEl’s machine learning algorithms and unique learning technology enable AI to process over 100 types of mortgage documents and facilitate UK-wide coverage.
Digilytics RevEl is also minimally invasive. Such modularity allows RevEl to be quickly and easily bolted to an existing loan origination system for easy implementation.
Digilytics RevEl’s proprietary AI and ML technology validates loan applications, thanks to its advanced configurable engine for completeness, accuracy and consistency.
RevEl also integrates the online and offline mortgage creation process to reduce financing time and origination costs while streamlining the entire mortgage process.
With real-time monitoring and predictive alerts, Digilytics RevEl offers unparalleled fluidity and security against breaches.
Transparency is essential for both the lender and the borrower. It improves trust and strengthens relationships with customers. With AI-generated reports from RevEl, evaluating model performance becomes a snap!
How does Digilytics RevEl work?
RevEl was designed from the ground up using the proprietary artificial intelligence (AI) capabilities of Digilytics platforms to:
- Reduce the cost of origins
- Reduce financing time
- Improve the borrowing experience
RevEl’s easy-to-mount feature allows it to harmonize with any financial institution’s loan origination system (LOS) hassle-free.
RevEl works by:
- Leverage AI and ML to validate applications
- Assignment of subscribers by algorithm
- Activation of real-time monitoring and alerts
The RevEl advantage
As the world continues to fight climate change, ESG (Environment, Social and Governance) investments are increasing.
British Prime Minister Boris Johnson has announced the launch of his 10-point plan for the UK’s Green Industrial Revolution. In the context of innovation and finance, he insisted on the development of cutting-edge technologies necessary to achieve these new energy ambitions and make the City of London the world center for green finance.
With Digilytics RevEl, green finance arrives in the mortgage sector by:
- Go truly paperless and leverage data online
- Leveraging Covid-19 recovery
- Support Green 2030
In addition to the Digilytics OBVIAX advantage, RevEl brings you:
- One-touch subscription; manufacturing in one day
- Intelligent Affordability Service (IAS) dramatically improves
- Income and Expense Analysis (I&E)
- First good application
- Intelligent Virtual Assistant Glass Tube Tracking
- Smart allocations
- First good chords
What does this mean for your mortgage services?
- 15% higher gross loans
- 40% more productivity
- 30% lower OPS cost
Any financial institution that has connected Digilytics RevEl to its LOS obtains a competitive advantage like no other!
In addition, institutions are also taking a further step towards a more sustainable and greener business model.
Digilytics RevEl’s advanced artificial intelligence technology is able to reduce manual processing time by up to 60%.
Enabling real-time status checking of submitted data, online / offline document upload modes, and less human administrative support mean better customer experience, increased lender reliability, and greater productivity with the same labor force.
Additionally, machine learning (ML) algorithms adapt to different use cases over time and enhance RevEl’s capabilities, making it a future-proof product that is always ready to go. in the mortgage industry!
In short, getting mortgage loans approved has never been so convenient, fast or hassle-free! It’s the mortgage solution everyone has been waiting for.
To get started with Digilytics RevEl, visit website now!