Introduction
Staff is the biggest operational cost in lenders; and time spent gathering, chasing, checking, fixing, moving stuff around, rekeying, and keeping everyone updated is the biggest driver of wasted effort. This manually intensive admin work is a major productivity drain.
Email based workflows are a root source of this waste, and are common across most lenders. Industry surveys find nearly half of lenders still collect data via emails PDFs and spreadsheets[1].
This reliance on people pushing paperwork creates inefficiencies that simply do not scale. Even lenders who have invested in portals, still have email, phone, and often paper processes running between their teams, brokers, and borrowers.
This leads to manual admin, long email threads with different people on copy, phone calls, moving documents around shared drives, spreadsheets to keep things up to date, and rekeying of information to get a loan from application to close.
It is quite common for lenders to run these human intensive processes when they launch; and they don’t work too badly at lower deal volumes when only one or two admin staff can handle things; but this way of working buckles under the weight of growth.
When planning for growth, lenders typically include additional headcount in their business plan, with a broad assumption that to do 30% more deals, an equivalent increase in staff will be required to manage the additional work.
We’ve worked with tens of lenders of different size in different markets, reviewing communication and processes across hundreds of cases, and see the same thing every time - there is always some email going on, and typically a single case involves tens of emails, over five people on copy, and often a manager or underwriter involved, and missing bits of information and documents being the thing that causes wasted time and effort.
If you look for where email is used in your operation, you will find the root cause of problems that are constraining your growth due to reliance on manual effort, and you will find the areas where investment in digitisation will lead to the highest return on investment.
In this blog, we explore why email driven loan processes are holding lenders back and how it leads to bloated admin costs and hiring. We will also see why adding more staff is a sticking plaster not a growth strategy, and how the latest AI developments can run alongside people to provide a much more scalable alternative to throwing more bodies at the problem.
The Inefficiencies of Manual Email Driven Processes
Incomplete Submissions and Rework
As a familiar example of the kind of thing that sucks up time, specialist lenders we’ve worked with can see less than 50 percent of the evidence documents that brokers send in being right first time. Missing bits of information, or incorrect documents is the norm not the exception. Every missing document triggers a back and forth cycle of more emails, phone calls, and delays to chase missing information; often across five or more people across lender, broker, and borrowers. Incomplete paperwork on a case, is reported as the number one avoidable cause of underwriting delays[2]. This ‘Submit Then Fix’ loop adds days or weeks per loan, and sucks up time from people who should be doing more valuable jobs.
Email Threads Drag Out
Email is asynchronous and slow. It needs the right people on each side of a conversation, to receive, read, review, take ownership and respond, while they’re likely doing multiple other tasks. A single loan file might generate a long email trail involving multiple stakeholders over several days as brokers underwriters and support staff reply all about needed documents or clarifications. Important information gets fragmented across messages. It is easy to miss an attachment or an instruction in a crowded inbox. These scattered communications cause confusion delays and mistakes[3] ultimately slowing the lending cycle and frustrating everyone involved.
Chasing & Re-keying
Loan underwriters and admin staff spend lots of time chasing documents and double checking data. Whether it is calling a customer about a missing signature or cross referencing an emailed bank statement these tasks eat into productivity. Manual data entry is another bottleneck, the same data point may be rekeyed into different systems six to ten times on average[4]. Each touchpoint is an opportunity for error. Research confirms that manual paper based data collection leads to inconsistent and time consuming underwriting decisions[1].
Errors
Where humans collect information manually, compile it, and move it around systems, errors are inevitable. Adding a borrower’s wife’s date of birth as 01/01/1980 because the lender portal needs this filed populating to create a case; a phone call on a bad line to with a busy borrower to get last months spend on groceries; a typo in an email; or a misfiled document can have outsized consequences from mispricing a loan to missing a compliance step… Every error triggers costly rechecks and fixes; in some cases we’ve even seen declines escalated to Exec because of the data of birth issue - right at the end of weeks of work on a case. If an incorrect figure is not caught until late in the process the lender might have to rerun large parts of the workflow at great expense[5]. Manual workflows lack the safeguards and accuracy that automated systems provide, and using technology to gather high quality information early in the process, check it, and move it around is a much better approach.
Security and Compliance Gaps
This is a trickier one as there’s a tough balance to strike between reducing friction, keeping borrowers safe from increasing information security risks, and ensuring data privacy. The reality is that lenders and brokers may see continued use of email and other channels such as WhatsApp as important to being accessible in a competitive market. Asking brokers to adopt a different channel for everything may well lead to some kick back. That said, cyber crime is rising at increasingly faster rates, with hackers stealing borrower’s sensitive ID and financial information over email being right at the top of the list of issues. Getting things like ID, bank statements, and payslips over email is also very easy for fraudsters to manipulate. Then when lots of documents are emailed around, it’s very hard to audit and demonstrate how the sensitive personal information within them has been protected and controlled. Over our years of experience considering the right balance here, we recommend understanding the pros and cons of different approaches, and within that while email and WhatsApp may still be the right channel for certain things, we strongly recommend that lenders avoid making brokers log on to portals with yet more user names and passwords, and that lenders approve FinTech services such as biometric ID&V, open banking, and secure E-signing, then empower brokers to use these to get the most sensitive bits of information directly from borrowers and shared with lenders through a solution where the information cannot be edited or manipulated along the way.
The Hiring Trap - More Staff is Not Scalable Growth
When loan volume grow, the first instinct is to hire more people and throw bodies at the problem. More loans mean more emails, more documents flying around, and more files to check; so managers hire more admins. While this may keep things moving initially, it is a symptom of a broken system rather than a sustainable growth strategy.
Studies in the mortgage industry have highlighted this trap. So long as loan origination remains a manual process headcount will continue to be the biggest determiner of throughput and operational costs notes a Mortgage Bankers Association whitepaper[5]. In other words a lender with email based workflows cannot increase output without also increasing staff and costs .
Rising Overhead
Recruiting training and managing more employees is expensive. The more people involved in a process the higher the fixed overhead for salaries benefits office space and other costs.
Skill and Training Delays
New hires are not instantly productive. In lending it can take months for staff to get fully up to speed on processes and compliance[5].
Operational Complexity
More staff juggling email threads and spreadsheets introduces new inefficiencies. Managers end up spending more time supervising and checking work which again detracts from strategic activities[6].
AI Can Solve The Problems
The latest Artificial Intelligence (AI) can handle administrative tasks at a speed and scale no human team can match and with far fewer errors.
Instant Data Capture and Processing
Instead of a loan coordinator spending hours reviewing emails and typing data into systems, AI can do this in seconds. For example Nivo’s Broker Concierge allows brokers to submit deals in any format even email and WhatsApp voice notes, and can automatically send the data into the lender’s system to generate a quote or DIP document, with no rekeying required[3].
Right First Time - No Go Backs
AI does not forget to attach the file or miss a required field. Intelligent document collection solutions can personally guide guide brokers and borrowers to submit complete and accurate packages. Nivo’s Broker Concierge even checks every document to ensure it meets bespoke eligibility criteria set by the lender, and also checks across the documented; for example - “Have we got a payslip for each of the last 3 months, does the name on it match the one on the ID document, is the invoice for the asset for the same amount as provided on the application form etc..”. The solution helps the broker through the process, handling any question, and the result is that the underwriters get the fully packaged case right first time with no go backs.
24/7
AI systems can work round the clock and handle multiple cases in parallel. Nivo’s Broker Concierge works over any channel, any time - it’s where your broker wants to be, whenever they want it. If your lending business doubles in applications, an AI driven workflow can scale to handle it without you needing to double your headcount.
Reduced Costs and Better Margins
By automating manual steps lenders can process loans at a lower cost per unit. Automatic quote and DIP generation, and data integration cut down underwriting time and overhead improving profit margins[4].
Better Customer and Broker Experience
Faster responses, daily updates, proactive support, and fewer errors create a smoother experience for customers and broker partners.
Concluding Thoughts
Every lender we’ve ever worked with is still using email with their brokers.
Look for where this is happening and you will find the areas where investment in digitisation will lead to the highest return on investment.
If you want to grow, then adding more staff is a sticking plaster not a growth strategy.
You don’t need to hire more people to grow because the latest AI developments can run alongside people to provide a much more scalable alternative that also improves broker satisfaction.
References