As the housing market takes a breather, most mortgage and real estate companies are turning their attention to reducing costs. And few processes are more costly or time-consuming than document management.
When it comes to improving efficiency, shortening the time between receiving loan documents and making use of them stands at the top of the list. Fortunately, there are many document management software options for streamlining operations, including products that leverage optical character recognition (OCR), AI and machine learning technologies. Yet there are just as many broad and bold claims being made about them. How do you know what to believe? Or better yet, how do you test these technologies?
To help, we list three important questions to ask when evaluating these claims. Before you begin comparing vendors though, you’ll need to ask yourself a few questions.
Mortgages may be a commodity of sorts, but every company is unique in terms of their business goals and how they get things done.
Before looking for document analysis technology, first ask yourself, “What specific problems are we trying to solve?” To answer this question, you must know what your requirements are on a high level. What workflows and documents are you using? What data needs to be extracted? And how do you intend to use that data? Which systems will be involved?
You’ll also need to know what your decision factors are. For example, how much are you prepared to spend on implementation and ongoing cost of ownership? How quickly do you plan to implement the solution? Is there an upcoming deadline for an audit you need to prepare for?
Once you know what your needs are, you can evaluate vendors by asking the following three questions:
- What will I actually get?
Simple question, right? Not exactly. If you’ve done any research into document technology vendors, you’ve encountered mountains of happy marketing lingo and hyperbole. What you need are facts, so this question demands a few follow up questions.
For example, will they do a live demo with you? Will they use documents you provide? What results will you get, and how are they measured? How granular are those results, how confident can you be with them, and what tools help you evaluate them?
Keep in mind that the mortgage and real estate markets aren’t static. What works today may not work as well tomorrow. So, what is the vendor’s approach to confirming results on an ongoing basis? The minute you hear, “you can set it once and forget it,” it’s probably time to look elsewhere.
- How does the system improve itself?
Now we’re getting into the nitty-gritty. The key here is understanding if and how results are improved over time, which is what you really want. You’ll also want to know how the accuracy of the results are measured and whether those measuring tools are available to you.
If you find the vendor uses machine learning, deep learning, transfer learning or convolutional neural networks to constantly improve results, you may be on the right track. If the vendor is using these technologies in a layered approach, that’s even better. But then you should ask whether the vendor built these technologies or licenses them. If they’re licensed, the vendor may not be able to explain how the system improves itself.
- What can I do with the results?
This is the time to find out whether your needs will be simply met or surpassed. For example, how easily are the results available for you to use with other systems, such as your system of record, data visualization software or reporting tools? What can you do to improve the results? How easy is it to implement changes to increase the number of documents recognized or the amount of data that can be extracted?
Finally, you’ll want to know how proactively the vendor adapts to change. After all, new document types and data needs are constantly evolving with new lending requirements, investor guidelines and market demands. How often is the technology updated? How frequently does the vendor make new releases available? How are they preparing for anticipated market changes? Are they willing to spend the time with you in a true partnership?
Gauging Future ROI
If you do this exercise thoroughly, you’ll have all the information you need to make a smart decision. Ideally, you‘ll be able to gauge future ROI in the form of quantifiable and qualitative savings.
Quantifiable savings is determining the amount of time in human process hours you’ll save by leveraging the solution, as well as how much you will shorten process cycles by reassigning staff to other areas. Qualitative savings can’t be measured as easily, but are equally valuable. It’s what you gain through outcomes such as enhancing risk management, using extracted data to feed data analytics initiatives and improving the customer experience.
At the end of the day, finding document technology that fits and is “real” is not an easy task, but it’s an essential one. At Paradatec, we’re always ready to answer your questions about our AI-based document technologies—plus we have real case studies showing they work. To learn more, please contact us at firstname.lastname@example.org.