What are the building blocks of digital lending?
HousingWire recently sat down with Steve Meirink, Executive Vice President and General Manager, Compliance Solutions, Governance, Risk and Compliance Division of Wolters Kluwer, to discuss the impact of digital technology on mortgage lending and how the future of digital lending to an era of accelerated and digital innovation. transformation.
HousingWire: What are the key drivers and trends driving digital lending adoption? How has the COVID-19 pandemic contributed to this?
Steve Meirik: Digital lending is now a must for organizations that need to differentiate themselves in the market by scaling faster with greater agility while reducing costs.
Plus, consumers expect better digital experiences — like what you get with Amazon or Uber. Companies that provide this kind of seamless user experience will move forward and those that don’t will lag behind. We’ve seen it with the COVID-19 pandemic, where demand for contactless transactions has taken off, like the “tap to pay” feature for your chip-based credit card. In the area of digital lending, this has led to the growing popularity of eClosings and Remote Online Notarization (RON).
HW: What are the main building blocks of digital lending?
SM: I joined this industry as a Retail Mortgage Agent, becoming a Broker Owner in my local community and I try to apply a simple concept that we share with clients and prospects, namely the idea of simplified digital lending. It starts with a document engine that provides the basic inputs for a digital lending transaction – fully automated with secured loan agreements and contracts. At Wolters Kluwer, our document engine is Expere, which is fully integrated with Lending Systems (LOS) and other core lending systems.
An electronic closing platform is also important for speeding up and simplifying complex loan agreements with workflow management to provide a simple and intuitive closing experience for lenders, borrowers and settlement agents. This is our Closing Center for digital mortgages.
An electronic vault or authoritative copy is also needed to consolidate digital loans into a single system and ensure certainty of digital assets with full ownership and control of assets. This is our OmniVault.
Organizations also need digital asset certainty based on immutable history and a digital chain of custody for all digital financial assets. The idea is that only one digital original exists and is legally transferable and enforceable. When you see Digital Original® in the financial services space, you can be sure Wolters Kluwer is behind the scenes to make it happen.
Finally, analytics and reporting tools are needed to analyze risk and ensure compliance through information sharing and accurate reporting. This is our Wiz technology, which provides data-driven insights and improves decision-making.
HW: For those considering a digital lending platform today, what are the key benefits they can expect? And for those who wait, what are the risks?
SM: A digital lending platform lowers traditional “barriers to entry”. Businesses can adopt new technologies faster while increasing efficiency, reducing costs, and increasing margin and profitability. And most importantly: they can deliver better customer experiences.
The risks of not moving forward? If you don’t, more efficient competitors will “eat your lunch” and cause you to lose business. Keep in mind that decisions made today will impact your business for many years to come. It’s important to leverage the expertise and experience of trusted advisors who have been working in this field since the dawn of digital lending nearly 20 years ago. Our team of experts, along with other industry partners, enabled the first digital lending transaction in many of the industries we serve today.
HW: Looking to the future, what will digital lending look like in the next few years? What are the important trends and changes we will see?
SM: We talk to clients and prospects about next-generation digital loan compliance management, which today means an all-digital platform with robust loan compliance. Increasingly, businesses will focus on what can be achieved by moving from manual to automated processes in terms of economies of scale and cost efficiency.
This brings a dynamic, enhanced, end-to-end user experience – and all the benefits of digital technology for rapid response and action.
A fully digital lending platform solution not only offers powerful tools aligned with key business processes, but also analytics to ensure broader compliance and a secured asset/portfolio with end-to-end certainty on digital assets. Find more information here.