“The UK mortgage market could be drastically improved by taking a leaf out of the books of firms down under and undergoing a more widespread adoption of automation technologies.”
I’m a strong believer in looking beyond our shores when it comes to technology and how it can be used to drive innovation. Of course, because of Silicon Valley’s dominance in the public consciousness, there is a tendency for people to assume that the US is the natural place to study but a lot can be learned from other countries and continents.
At The Robot Exchange, we’ve watched the technological advances within financial services in Australia with keen interest; I believe the UK sector can learn an awful lot from the implementation of Robotic Process Automation (RPA) down under.
Understanding RPA
RPA tools are used to manage specific computer software, known as a robot. The robot is used to quickly automate existing processes for transactions, data processing and communications across a range of IT platforms. Now, that probably doesn’t sound terribly exciting; but the real power and potential of RPA comes when you have a number of robots under your control.
Multiple robots combine to provide an alternative workforce, taking over the functions of humans allowing that expertise to be used on more value-add activities. Equally as important, is the fact that they can continuously repeat tasks, without error. Human beings can be fallible – they make mistakes, especially when having to repeat tedious functions over and over again. What RPA allows you to do is deploy people where are better served: fulfilling functions which require initiative and human reckoning, while the robots work on the bread-and-butter tasks – 24/7 if required.
Examples of RPA could include generating an auto-response email, communicating with software applications such as Microsoft Office and Outlook, ‘scraping’ information from a database or web page and populating another database with the data, and using many robots to fulfil a large range of automated tasks; the possibilities are endless.
The Australian experience
The mortgage industry in Australia is leading the way and showing what can be achieved by utilising RPA. According to MaxFunding, a small business funding facilitator in Australia, the potential cost savings are hard to ignore:
“The financial industry, especially mortgage lending, is the perfect sector for the deployment of RPA systems. Reducing manual operations, removing discrepancies, and avoiding rework raise savings for mortgage lenders. One mortgage broker, for instance, is likely to obtain $180 for each loan on preparation and operation activities alone.
“Automation creates an annual savings of over $1million and saves the labour of around 94%. Also, with no operating consequences, this very same lender can carry on extra business lines.”
Within the mortgage market in Australia, robots are executing processes much more accurately and with greater productivity than human workers. A mortgage in Australia takes on average 30-45 days to complete, from submission to approval. By using RPA tools in mortgage origination processing, businesses are dramatically reducing time spent on procedures, are working 24/7 on processing and thus making large reductions in processing and ultimately completion times.
From a compliance point of view, RPA can minimise error rates, as it avoids errors slipping in, which is much more likely to occur with the manual processing of mortgage applications. Robots follow the rules it they have been set; so long as the rules have been created currently, no mistakes will be added.
Following their lead
The reality is that in the UK, adoption of RPA tools and processes within the mortgage industry has not been as widespread as in Australia. There are no regulatory reasons for this; it is more the case that the greater existence of legacy systems makes it harder to firms to believe that they can migrate to newer, more flexible technologies such as RPA, while for many organisations, margin pressure and higher rates mean large capital expenditure isn’t always possible.
In addition, the UK’s smaller building societies are more traditionally ‘people’ businesses. Mutuals arguably have an over-reliance on people for tasks that can be automated and if they were, it would allow those resources to be reallocated to support and improve the service to customers, as well as saving costs in the long run.
In this country, product transfers are currently likely to involve a manual process, which puts pressure on underwriting resources when they are also needed for new business; robots could replace much of this manual process and ease pressure on both product transfer and new business processing.
That’s not to say that the benefits of RPA aren’t being realised by some mortgage firms. The Robot Exchange is currently working with a large network, managing its B&C process, and fulfilling 75% of all inbound processing, as well as automating a broker to Sopra back office decisioning process for a building society.
The UK mortgage market could be drastically improved by taking a leaf out of the books of firms down under and undergoing a more widespread adoption of automation technologies. In our experience, firms realise their return on investment in months not years and enjoy accurate, fast, and economic processing from their robot deployment. What’s stopping you doing the same?
