Lenders are looking to new fintech  when trying to gain advantages over competitors, according to a recent study from Fannie Mae . The Q1 2019 Mortgage Lender Sentiment Survey  from the GSE indicates that Application Programming Interfaces (APIs) and Optical Character Recognition (OCR) are the top two technologies with the greatest potential to help improve or streamline processes, according to lenders.
Businesses are increasingly leveraging digital technologies to reduce errors and costs, transact faster, and drive a richer and better customer experience,” said Prabhakar Bhogaraju, VP, Digital Products at Fannie Mae. “In the mortgage industry, many processes involve transmitting a large volume of data among a series of interconnected parties, including consumers, investors, and an array of service providers and stakeholders. Over the past few years, technological advancements such as artificial intelligence, APIs, and document digitization have gained traction, enabling digital transformation.”
Fannie Mae’s Economist and Strategic Research group found that nearly two-thirds of lenders selected APIs and OCR as the top two technologies with the greatest potential to help improve or streamline processes, adn were the most likely technologies to be rolled out by lenders within the next couple years.
Other technologies lenders reported as offering the greatest potential to improving lending processes included AI/machine learning, robotic process automation, chatbots, and distributed ledger technology. Ease of technology integration was cited by lenders as the most important criterion in deciding whether to adopt a third-party API.
Bhogaraju noted the importance of tech to lenders.
“Throughout the past several quarters, lenders have continuously reported the challenge of declining profit margin and the need to reduce costs and improve customer experience,” Bhogaraju said. “APIs and OCR have the potential to help address these issues. However, previous research has shown that integration difficulties and investment costs are lenders’ top barriers. Identifying the benefits that justify technology investments may not be easy since the impacts are often multi-layered and include a mix of direct and indirect benefits.”
According to Bhogaraju, APIs and OCR may also yield fewer mistakes, less rework, and an ability to translate fixed labor costs into variable costs, allowing a business to scale capacity up or down as the market expands or contracts.