The dawn of home loan automation

Automation is rapidly transforming financial services, bringing about significant changes in how institutions operate and serve their customers. 

"Traditional home loan processing involves numerous manual steps, from document collection and verification to approval. These processes are often time-consuming and prone to errors.”

From enhancing efficiency to improving customer experience, automation is paving the way for a new era. This transformation is already evident in banking, including in home loans where automation is set to revolutionise the way customers obtain mortgages. 

Think about how people obtained mortgages in previous decades. Meetings with bank managers to go over documents in person, printing multiple copies of paperwork to be signed by hand and quite often waiting long periods for a successful outcome. 

Like many processes in banking, this has changed significantly in recent years – mostly due to the rapid progress of technological innovation. 

The financial services industry has always pushed these boundaries and the integration of automation, artificial intelligence (AI) and machine learning has accelerated, leading to more efficient processes for both frontline sales staff, operations staff and our customers. 

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Picture of Shannon McMahon, Managing Director Home Loans, Australia Retail at ANZ.

Automation in financial services encompasses a wide range of applications, from robotic process automation (RPA) which handles repetitive tasks to AI-driven analytics which provide deeper insights into customer behaviour and market trends. 

One of the key benefits of automation is its ability to reduce manual handling times and human error. By automating routine tasks, financial institutions free up their employees to focus on more complex activities, while reducing the wait times for customers, making the home-buying process a simpler and better experience. 

Reducing processing times, improving customer experience and increasing accuracy can achieve up to 200 per cent return on investment within the first year of RPA deployment in loan processing, according to Accenture. 

Transforming home loans

Traditional home loan processing involves numerous manual steps, from document collection and verification to approval. These processes are often time-consuming and prone to errors, leading to delays and frustration for customers. The home lending sector is an area where automation can make a significant impact. 

Banks can use automation to address many of the challenges and processes associated with obtaining a home loan. For instance, ANZ implemented a new platform called HLQ, designed to support our Customer Operations teams to speedup home loans processes. 

HLQ automates tasks such as document ingestion, image processing, categorization, indexing, redaction and data extraction. It also speeds up the process by bringing the relevant documents and data points to the user for the specific activity they are doing. This reduces manual handling and allows the teams to manage more volume without additional resources or overtime. 

Another example is JP Morgan Chase in the US, which implemented an advanced AI system to automate aspects of the loan approval process. This system utilizes machine learning to swiftly and accurately analyse various data points, including applicants’ credit history, recent transaction data and current financial behaviours. 

A survey of 200 senior executives from the US mortgage industry revealed more than half agree AI is revolutionising processes. Nearly half of respondents said the expected upheaval amounted to ‘industry disruption’. 

Enabling faster turnaround times allows customers to receive decisions on their loan applications more quickly. This is particularly important in a competitive market where speed can be a differentiating factor.

In addition to HLQ, ANZ has introduced technological solutions to make things easier for our customers – including eSign which takes an extra step out of the process for our customers.

Additionally, automation enhances accuracy by minimizing human errors, ensuring all documents are correctly processed and verified. According to Cognizant, 60 to 70 percent of mortgage processes are perfect candidates for automation. 

Future technologies

Looking ahead, the role of automation is set to expand as technology continues to evolve. We can expect to see more sophisticated AI and machine learning applications to handle even more complex tasks. 

For example, AI-driven home lending systems can analyse vast amounts of data to assess creditworthiness more accurately and fairly, potentially opening up access to credit for underserved populations. 

But that’s not all - automation can enhance customer experiences by providing more personalized and proactive services. For instance, AI-powered chatbots can assist customers in real-time, while predictive analytics can offer tailored advice based on individual customer profiles.  

This level of personalization can help build stronger customer relationships and loyalty. The same survey found 75 per cent of firms have at least one customer-facing solution supported by AI, with loan application being the most frequently cited solution. 

ANZ is focused on improving the financial wellbeing of our customers. Our use of AI and other advanced technologies is guided by our Data Ethics Principles, which ensure we use data responsibly to build customer trust and support responsible data-driven innovation. 

These principles help us evaluate the human impact of how we use data, technology and AI, ensuring our actions align with our Corporate Social Responsibility and prioritize the interests of our customers. 

Part of embracing new technology at ANZ has been ensuring our teams are equally dedicated to improving the sustainability and financial wellbeing of our customers. 

By using AI and other new technologies, we aim to provide great customer experience, trusted services and data-driven insights to predict future needs and trends. 

Automation is transforming financial services and the impact on home loans processing will be profound. It will pave the way for a more efficient and customer-centric future. 

As we continue to embrace these technological advancements, the possibilities for innovation in home loans and financial services are limitless. 

Shannon McMahon is Managing Director Home Loans, Australia Retail at ANZ.