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Big Data’s Power to Drive the Industry Into the Future

(Editor's note: This select print feature appears in the October 2016 issue of MReport magazine)

By Jerry Halbrook

The term “Big Data” has many connotations, some of which are accurate and others that represent misconceptions about what Big Data is and what it can do. Mortgage industry organizations rightly believe that Big Data—when used in connection with powerful analytics tools—can help provide vital insights into how their performance compares to industry norms; help them interpret customer behavior to identify evolving product and solution preferences; and even predict which customers are most likely to prepay their mortgage or go into default. 

Of course, at the heart of “Big Data,” there is far more than just data. In fact, there are tremendous complexities associated with a Big Data strategy that must be expertly managed in order to derive the truly powerful benefits that are attainable. A Big Data program must be supported by a robust platform that is not only armed with the ability to access and pull in relevant datasets from internal and external sources, but also that quickly analyze and generate actionable insights from that data.

With Big Data experts on board to help determine if the right infrastructure and tools are in place and that data assets are fully accessible to deliver business intelligence benefits, the tremendous insights and overall gains that are possible make it well worth the effort to implement a Big Data strategy. In fact, those in the mortgage industry that have successfully implemented a Big Data platform are doing things today they could never have done before—and are deriving impressive results in areas such as customer satisfaction and retention, risk management, and operational efficiency.

Leveraging Internal and External Data

Today, there is greater access to vast pools of data than ever before. In fact, the sheer volume of available data not only offers the promise of important discoveries, but it can also make it difficult to isolate actionable insights that are meaningful to the organization and beneficial to its customers.

It has been challenging to harness the business intelligence power of datasets that are segmented into multiple database assets. For example, origination data has typically been stored in one database, servicing data in another database or many databases, and external data (such as procured public records data) stored in yet another database, and so on. 

Mortgage organizations have long tried to merge external data records with internal information in an effort to better serve their customers and, when possible, to predict customer behavior (such as the likelihood of mortgage loan prepayment or default). However, while these efforts may have produced useful information, it has been an unwieldy and time-consuming process—especially for institutions working with 20 or 30 databases. 

In the absence of a Big Data platform, the responsibility of looking for golden nuggets of real intelligence has typically fallen on the shoulders of analysts. Often using manual processes, analysts would select and pull datasets from various sources, move them into a spreadsheet tool like Excel, and then analyze the data in the hope of finding meaningful insights and actionable information. However, this approach is something like trying to mine gold with a spoon. It is difficult at best, and the results may only be of marginal benefit to the organization.

Instead, the industry needs the ability to seamlessly leverage all the data—both internal and external—that’s needed not only to help solve targeted business problems but also to enable tangible business results. In an industry comprised of a vast and complex network of connections, variables, and possibilities, anything less is failing the mortgage enterprise.


The Power and Promise of the Big Data Platform

Technology has evolved to the point where one comprehensive Big Data platform is not only possible, but it is equipped with the computing power needed to support the mortgage industry’s demanding environment. Today, institutions can tap into the many advantages of a Big Data platform, including easy access to both client and public information data, far more quickly than previously possible.

Certainly, the ability to access all needed data records from one platform is beneficial in its own right, but the sophisticated analytical tools that are also accessible through a Big Data platform offer the ability to combine and analyze data elements that may never have been looked at before. For example, today’s business intelligence tools can provide financial institutions with the ability to look across their operations to identify individuals and branch operations that are exceeding expectations and understand how they are accomplishing those outcomes, as well as identify areas of the organization that are not meeting performance standards and the key factors that are associated with those results. 

And this information is available in near real-time, anytime.

Beyond the operational improvement opportunities are the insights that enable financial institutions to better understand and react to the needs and circumstances of their customers. By leveraging a Big Data platform, institutions can link customer mortgage data from various sources, such as an origination system and a servicing system, and then link in data from external sources of information such as public records, social networking, and mobile data to see a more complete picture of their customers. This allows the institution to proactively deliver well-timed and well-targeted offers to their customers and in the process, retain and grow revenue while helping to strengthen customer loyalty. 

This access to a fuller picture of each customer has many benefits that add up to create a great customer experience. Not only does this intelligence allow customer service representatives to really consult with their customers about products and services that may be beneficial to them, but also it allows each customer to be seen as a unique individual and provided with the kind of proactive service that makes them feel that way.

Actionable Insights

The power of Big Data is not just about generating information, but it is also about the ability to utilize actionable insights to actually trigger appropriate events. For example, in today’s typical operation, information about a delinquent customer may show up in a report, which is then handed off to someone to initiate the appropriate actions within their technology system. A Big Data platform can automatically push that delinquency information into the appropriate user’s system so that the needed actions can be seen within the system and allowing those actions to be handled much more quickly and efficiently.

Imagine the power of these capabilities as they operate across the entire mortgage lifecycle.

With the ability to link relevant data together, such as a customer’s servicing records with public records data that shows that his or her home has been listed for sale, an alert can be sent directly to a loan officer’s desk or mobile device for action. The loan officer can then make an outbound call to that customer, perhaps with an offer to pre-qualify him or her for a certain loan amount that will be useful as the customer shops for a new home. Since it is generally known that the first mortgage company to talk with a customer usually gets the loan, this can represent a tremendous advantage for lenders. This is just one benefit in a vast pool of possibilities.

Driving Data Quality Improvements

Improving the quality of data by utilizing Big Data capabilities to compare information across internal and external databases—and make corrections as necessary—helps the industry continue its drive toward a single version of truth. Whether it’s simply updating the system of record with a higher quality address or enabling the adoption of cohesive data standards across the enterprise, a Big Data platform can help move the industry closer to a “single version of truth.”

The mortgage process also creates a larger set of consumer financial data than any other transaction. Clearly, successful mortgage companies of the future will be driven by quality data management and the ability to utilize that data to create benefits for their customers and insights for their firms. Certainly, the complexity of mortgage data lends itself to a Big Data strategy.

Paving the Way for the Digital Mortgage

Another big push in the mortgage industry is to establish an efficient, trustworthy digital mortgage option that is user friendly for consumers but robust enough to manage the complex data and computational elements of the mortgage transaction. Using a Big Data platform, originators can quickly access high quality data from multiple sources to populate the digital loan application or to help validate the data in the application. It also allows mortgage lenders to serve up the right information at the right time and in the right place to help facilitate an error-free digital mortgage transaction.

Big Data Changes the Game

Clearly, a Big Data platform with robust analytical tools is a game changer for the mortgage industry. Analysis that typically takes hours or days can occur in minutes or seconds. Insights that have been nearly impossible to uncover can be readily identified to help secure new business opportunities and help to slow servicing run-off.

The industry will be forever changed by the capabilities of a Big Data platform, and in the future, the mortgage industry will be described as fast, efficient, intuitive, and easy to deal with. It can be the core driver of change, the enabler of change, and a key facilitator of even greater ideas and opportunities ahead. Some call it the “Big Data Movement,” but at least for the mortgage industry, it may be better characterized as the “Big Data Revolution.”   

About Author: Jerry Halbrook

Jerry Halbrook is the President of Black Knight Financial Services' Origination Technologies division, with responsibility for overseeing the strategic direction and business operations of the company's origination technology assets. Halbrook brings over 27 years' experience focusing on financial management, technology, and operational management. He can be reached at [email protected]

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