Editor’s note: This issue originally appeared in the April issue of DS News.
New mindsets are impacting the innovation space as it looks beyond technology. Varma Penmatsa, who is responsible for providing effective product and technology solutions through customer engagement, design thinking, innovation, and agile delivery at Fannie Mae, spoke to DS News on why it was important to engage customers to build and implement effective digital servicing products and what gives him the satisfaction of a job well done.
What role does customer engagement play in providing efficient and effective technology?
Our customers are at the center of everything we do at Fannie Mae, and customer engagement is key to driving innovation. We engage with our customers early and often, through our customer co-development panels that help us receive direct and continuous feedback, test and build products, and ensure that we are delivering the right capabilities that address their pain points.
I’m part of Fannie Mae’s Digital Products organization, which won the 2019 Business Intelligence Group award for leading innovation in the industry. A key tenet of our digital operating model is Test & Learn—we design and pilot with customers to directly address their business needs, before we scale the new capabilities for full market availability. This process ensures that we have an opportunity to get customer feedback with minimal initial investment and then can easily pivot if needed, and without significant impact on resources. Test & Learn is now part of our organizational DNA and we have seen substantial improvement in our speed of delivery and success of the product adoption by the customers.
Please give some examples of the projects driven by innovation that you have been engaged in recently.
Fannie Mae introduced "Simplifying Servicing" in early 2017, a multiyear initiative with the focus on innovation across the entire servicing life cycle, to help address key pain points and reduce costs for our customers.
We have delivered several innovative capabilities to date that have been well received by our
customers and are working on more. Ask Poli, launched in 2018, is our self-learning tool that provides fast and accurate answers
to Fannie Mae’s Selling and Servicing Policy/Guides. Historically, lenders searched for policy guidance on fanniemae.com, Google, or other websites and struggled with long, confusing answers and more links. Now, Ask Poli not only gives them the most accurate answers immediately, but it also leverages Natural Language Processing (NLP) so that answers are shared in easy-to-understand terms. Ask Poli’s artificial intelligence (AI) helps it continuously learn through the inputs provided by users, though we also actively monitor the tool to ensure that the responses are in line with our policies. Since the launch, we have received more than 600,000 selling and servicing queries, giving us tremendous real time insights and helping us to respond to customer needs quickly. We are now working on increasing distribution channels and expanding content to address more complicated scenarios.
In late 2017, we launched a new faster, simpler servicing claims experience that lowers servicer costs and effort by providing data transparency and document-free submissions on most claims. This capability offers one-to-two day decisions and simplified policies for our customers on claims reimbursements.
Loan Servicing Data Utility (LSDU), launched in 2018, is a suite of self-service tools providing near real-time view for servicers into Fannie Mae loan data and exceptions. This capability enables servicers to reconcile their loan and cash positions with us throughout the month, increasing self-service and reducing operational time and cost. We are also enabling this capability with APIs such that customers
can build direct integration and automation from their current processes.
We have recently launched a new tool to simplify the Mortgage Insurance (MI)/MI termination process for the servicers and borrowers. This innovative capability combines Fannie Mae’s automation and standardization of valuations with digital experience for the customers, enabling servicers to receive MI termination qualification decisions and valuation results from Fannie Mae’s Servicing system (Servicing Management Default Utility/SMDU) and APIs. This simplification will also enable servicers to reduce risk and increase their self-service to borrowers as part of their digital transformation.
What impacts do you see on resources due to artificial intelligence (AI) and automation?
Our goal when we deploy AI and/or automation capabilities is to create efficiencies or capacity for our teams, such that they can focus on high value delivery for our customers. When we use AI (like Ask Poli) in our capabilities, we augment with human driven processes that ensure the tool’s learning is meeting our policy and/or business guidelines. This is key for us to manage towards a goal of achieving higher automation maturity without introducing risk.
What does a typical day look like for you at Fannie Mae and what's the most rewarding part about your job?
On any given day, you would find us focusing around two areas. The first is customer engagement, where we talk to the customers daily to solve a problem they’re facing or to get their feedback on whether they are deriving the expected value from a capability we have co-created with them. The second aspect of my day revolves around empowerment. My job as a leader is to ensure that I’m empowering my team to be able to innovate and think outside the box as they engage directly with the customers to build solutions. Delivering value to our customers has been one of the most rewarding aspects of my job at Fannie Mae. It is very satisfying to see customers getting real value using the innovative solutions we’ve been able to provide them that directly solved their pain points.