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Natural Disaster Meets Digital Disruption

Editor’s note: This feature originally appeared in the October issue of DS News

Like many of you, I’ve been in the industry long enough to have survived the financial crisis and then some, so when I hear familiar phrases like “workflow automation” or “operational readiness,” it’s not the first time. However, amidst what may seem like a lull in financial recovery, our industry is absolutely on the cusp of digital disruption. We are also heading toward the third consecutive year for historic volumes of natural disaster.

The intersection of these two “Ds”—disasters and digital disruption—creates the perfect springboard for improving response times and service through the automation of disaster recovery processes. Moreover, a digital disruption can be a catalyst for realizing similar benefits throughout your organization. The overall bottom-line opportunity can help offset shrinking resources and margins as well as provide improved transparency for your borrowers, industry partners, and investors alike.

Creating an Opportunity Out of Disaster Recovery 

Our industry needs to understand and embrace disaster assistance, despite the disturbance, volatility, and resource constraints involved. Whatever the disaster, it is an opportunity to strategically service the borrower in ways that create long-standing customer loyalty and preference.

There shouldn’t be a difference in how borrowers are treated at various stages of the loan lifecycle, especially during times of unforeseen disaster. When approaching or rethinking your disaster-recovery strategy, consider implementing technologies that can seamlessly take the customer from onboarding through each phase of servicing, including loss mitigation—with no gaps. Such capabilities are valuable for servicing in general but even more important when evaluating an uncontrollable event such as a natural disaster.

Imagine taking a proactive approach that will move your organization away from not only reactively responding to the onset of borrower calls but through numerous changing programs and requirements for disaster-recovery assistance. Tapping automation that goes beyond basic rules, puts control and flexibility in the servicer’s hands, simultaneously supports change and urgency, and offers management transparency is not an impossibility. The opportunity exists and is available today.

Minimize Risk While Managing Through Disaster

As any mortgage servicer will attest, managing through natural disaster events can wreak havoc on the cost of servicing. This is why today’s technology needs to help reduce risk for servicers, as well as their borrowers and investors, when a disaster occurs. The goal is to minimize expenses and add controls during events that can quickly go in the other direction if planning and proactive strategies are not in place.

When planning your strategy, it’s important to look at all of the pieces of the process that need to come together when disaster strikes. Obviously, the phone rings first, but borrower support can last for many months as related issues, including delinquencies, accumulate. During this time, borrowers and investors are both looking for immediate and continuous communication from the servicer, who must also strive to reduce errors and response times.

Events, timelines, program qualifications, and collateral damage can all come into play. By implementing a sophisticated workflow application, servicers are able to track, manage, and cure disaster related activities, improving scalability, maximizing resource utilization, and minimizing risk during a time of duress for all parties.

Bringing Industry Participants Together

As tragic and tumultuous as disasters are, in general, they can also bring people together. In the case of mortgage servicers, putting the borrower and investor first in line can bring all parties closer to solving the shared challenges tied to disaster. Through automated workflow technologies, servicers are able to improve relationships with customers by providing quick, efficient, and flexible service. Investors want accurate and timely reporting, which can be accomplished through a similar approach.

By leveraging emerging technologies that move beyond basic rule management, servicers can also maximize their utilization of data and AI, coupled with eligibility modeling and flexible reporting. This lift is immediately transferred to borrower and investor inquiries. The result is a combination of automation powered by communication, coupled with problem-solving capabilities that have the capacity to speed up the process and mitigate the overall potential on the bottom line.

While there are any number of automated workflow technologies available to servicers, the best are those which have evolved with our industry through the entire post-financial crisis era. These solutions have migrated into increasingly sophisticated applications that leverage a complete suite of investor programs targeted to support loss mitigation, including disaster recovery strategies.

A high-quality workflow technology provider should also be able to assist servicers in automating their strategic approaches to process administration, change management, risk control, and cost containment. Whether your team is dealing with borrower mobile communications managing insurance remittance for property repair, or the complex network of conflicting timelines, there are solutions on the market that are already configured to help address your needs. Partnering with such a provider can help you stay on the forefront of digital disruption with technology that derives flexibility from sophisticated data streams and AI, delivered through a user-friendly application that is mobile-ready.

Bringing data disruption to disaster recovery reflects where our entire industry is headed. With emerging technology, we no longer have to treat event-based obstacles as a one-off, exception-handling juggling exercise. Embracing technology actually helps you put the customer at the forefront of your operation as well. Sophisticated automated workflow applications can bring all of these aspects to your organization in fairly short order.

Workflow has changed, like everything else in our industry, so take your time and find a partner that understands both the value of your customer and the importance of your corporate culture. Simply checking boxes and implementing basic industry rules will not get the job done in today’s market. Mortgage servicers need innovative partners that understand the difference between business and success.

The bottom line is that natural disasters do not need to create workflow disasters—nor should they. They offer a prime opportunity for servicers to enhance customer service and take a giant technological leap forward. The key is to capitalize on technologies emerging out of digital disruption to manage disaster recovery and win customer allegiance at the same time. By letting automation handle the ups and downs of disaster mitigation, as well as its complexities, servicers can create eternal customer loyalty.

About Author: Jane Mason

Jane Mason is the Founder and CEO of Clarifire and the creator of the CLARIFIRE, a sophisticated, automated workflow engine that streamlines and integrates all of an organization's business operations. Under Mason's leadership, CLARIFIRE has won numerous awards over the years including one of Cloud's Top 500 Applications Vendors for the past two consecutive years. She can be reached at JMason@eClarifire.com or on LinkedIn at LinkedIn.com/in/clarifire.
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