Today, we have the makings of digital mortgages, consisting of online applications, verifications, approvals and closing; the paperless, virtual mortgage.
FinTech companies and processes were created to enhance the consumer experience while improving their communication and engagement with financial institutions.
Although a benefit and a big step forward, this presents a whole new set of challenges for consumers, lenders, and regulators.
The resulting coupling of increased regulations and laws, with a more technologized loan process, created the need for more complete regulatory compliance. RegTech was born.
Challenges include such things as:
- The virtual validation of consumer identity and related information
- The creation of digital documents and recordings
- Concerns about consumer privacy, data usage, and distribution
- How lenders can ensure they are in compliance with the myriad of lending laws, as well as, those governing consumer privacy
- Confirmation that they are dealing with a real customer, not an identity thief?
Check, reverify, authenticate and then reverify…
RegTech providers work with financial institutions to create analytical tools to quickly analyze large amounts of data to determine regulatory compliance while detecting potential risk areas based on past problems. This creates a complete, quick, accurate analysis of big data.
Some of the areas that can be monitored and analyzed include:
- Employee surveillance
- Compliance data management
- Fraud prevention
- Audit Trail Capabilities
It all depends on what the financial institution wants or needs to monitor and when.
Think of HMDA today. It’s important not only to collect and report your loan data but also to know in advance what that data may tell about you and your lending patterns to the CFPB.
Having the capability to slice, dice, and carefully analyze your HMDA data is paramount to your success as a lender.
Not just identifying potential problem areas for correction, before CFPB does, but to determine what products are most profitable, the highest and best rates of market penetration, which LO’s produce the best business, and the overall quality and compliance of the loans originated.
Most lenders already use some sort of RegTech for their TRID compliance reviews today.
RegTech can ensure your regulatory compliance while making you a better, more complete, compliant lender.
Trend analysis of the results, with appropriate related action plans, will help to identify needed correction and training to improve production and operation processes. This all leads to better company and loan performance – and better profits.
The missing link in the technology evolution has arrived. RegTech will help you efficiently ensure that you are doing things compliantly while identifying potential problem areas needing your attention.
All to make you a better lender.
The game has changed. Play different. LoanLogics can help.