The American Bankers Association’s endorsed solutions are backed by a comprehensive due-diligence process, analyzed by industry experts and field-tested by bankers. The report is designed as a robust industry analysis tool.
BY PAUL C. KATZ Digital Transformation: The State of Play for Community Bankers Digital transformation was on the program – and on the minds of the attendees – at the American Bankers Association Conference for Community Bankers in San Diego this week. I moderated a panel featuring Bryan Luke, President and Chief Operating Officer of Hawaii National Bank, and two of my colleagues, Ken Janik and Colgate Selden. We spoke directly with conference attendees about the relationship community banks have with digital lending. Our panel – Digital Lending: Risks and Opportunities – explored the economic, technological and social forces driving digital transformation efforts. We examined different tech-implementation strategies bankers are considering and conducted real-time audience polls, providing timely insight into bankers’ thoughts on digital lending. Here are some of the highlights from Tuesday’s session. We set the stage by sharing some provocative predictions from leading industry consultants and
Even in the best of times, mortgages can be challenging for community lenders. Fannie Mae reduced its 2019 volume estimate, and the 2020 outlook isn’t much better. Average origination costs have hit a new high – $10,200 according to research by the Mortgage Bankers Association and Stratmor – squeezing margins even more. Factor in increased competition – and the added tech investment – from money-center banks and fintechs, and it’s safe to say we’re confronting some stiff headwinds. Recently, three mid-size banks examined their situations and concluded exiting the mortgage business was their best option . As one CEO summed it up: "We have been in the mortgage banking business for many years and have weathered unfavorable mortgage banking environments in the past. Unfortunately, the current poor operating environment is coupled with fundamental changes in the mortgage banking industry, such as more burdensome regulations, required investment in expensive technology, fierce competition,
Bankers enjoy a dizzying array of opportunities to leverage new partnerships to cut costs, boost profits, improve technology, enhance the customer experience – and sometimes – all of the above. That’s the good news. The not-so-good news is sifting through an increasingly complex landscape of new entrants and established vendors and vetting potential partners takes time, energy, expertise and money– often more than any one bank can easily manage. This is where a national trade association is uniquely positioned to add value. It can spread research costs across a diverse membership base while evaluating best-in-class providers offering a broad range of products and services. THE ABA ENDORSEMENT PROCESS The concept behind the American Bankers Association’s due diligence process is as simple as it is successful. Its process identifies proven, reliable vendors while saving banks time and money – and uncovering areas of information that could otherwise be difficult to obtain.
Mortgage origination costs keep climbing, reaching a record $9,299 per loan in the first quarter of 2019, according to the Mortgage Bankers Association. This upswing has been fueled by rising compensation, benefits, technology and compliance costs, putting pressure on margins and leaving originators in a tight spot. Source: American Banker Outsourced mortgage fulfillment is recognized for its ability to help mortgage lenders manage costs and remain competitive in the face of ever-increasing built-in expenses. Many forward-looking lenders are embracing comprehensive outsourced fulfillment solutions to improve results, save time and free up resources to focus on the customer experience and contribute to overall business growth. But where can lenders actually save by outsourcing their mortgage operations? Does outsourcing really reduce cost and increase lender profitability? In a word: Yes. The key is to control what you can – and you can control fulfillment costs (and gain added savings along the
In the immediate mortgage-crisis aftermath, most consumers believed getting a mortgage was hard. And it was. But something changed. The past four years spawned multi-billion-dollar ad campaigns from mega lenders reassuring consumers that getting a mortgage is simple now - thanks to technology. (Spoiler alert: it’s not.) The perception may have changed, but mortgages aren’t “easy,” and the true transformation from an analog to a digital mortgage process is still in its infancy. When we ask clients what they’re looking for from their technology solutions, most, but not all, lead with, “We want to do things like we always have, only faster, cheaper and in a less-cumbersome way.” So why is this taking so long? Compliance, until relatively recently, was an all-consuming, moving target diverting attention and resources away from innovation. The boom-and-bust mentality of the mortgage business — “We’re too busy doing refis to upgrade our systems; refis have