The LOS Of The Future

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As other loan origination systems struggle to be all things to all people, Fiserv thinks that it has truly achieved that goal with its Common Origination Platform (COP). The system provides an end-to-end LOS solution that goes well beyond being just a document preparation system. The software is highly configurable and is built with open architecture that delivers efficiencies across business channels. COP supports the origination of mortgage, consumer, home equity and business loans on a single platform. With this solution, lenders can establish their own business standards, including operating procedures, conditions and limits, automating virtually every transaction and promoting consist processes. Lenders also can set compliance requirements and perform regulatory updates en masse without duplicating tasks or keystrokes, which frees up valuable time and resources. How does this compare with other LOS systems? And what does COP have in store for the future to remain cutting edge?Mark Deese, Product Manager for Lending Solutions, Fiserv, answered these and other pressing questions.

Q: How has the LOS space changed over the past five years?

MARK DEESE: The LOS has changed in a lot of different ways. Competition is disappearing due to some vendors closing up shop and others getting acquired. Regulatory items are also taking over as the No. 1 priority. Road maps, regardless of who you are as a vendor, have drastically changed. You have a little less sizzle, in a sense, and more emphasis on regulatory support. I’ve seen is a lot of User Interface changes. The idea that custom or homegrown systems are better is becoming an idea of the past, as well. A lot has changed in the LOS space.

Q: What do you expect the LOS space to look like five years from now?

MARK DEESE: All of the vendors have streamlined. Everyone in the industry is kind of on the same page with what the LOS can do. The look and feel might be a little different, however. The differentiators between LOS players is going to be very different in five years. As I see it the ability to offer a top-quality customer experience is going to set the best LOS players apart. If you think about it there aren’t many different ways to process a loan, and with new regulation, that’s forcing more best practices to the forefront. So, the lender that can offer the customer a better experience and better educate the customer will be the successful lenders. The best technology players will support lenders in this movement.

Q: On a separate, but related note, there have been a lot of LOS mergers and acquisitions. Do you expect that to continue and how do you think it’s impacting the space?

MARK DEESE: My first thought would be to say that mergers and acquisitions will continue, but then I take a step back and think about the lenders themselves. In my view, there were a lot of mergers going on in 2008 and 2009, but that has started to slow down, especially when it comes to the bigger names. So, I would anticipate that mergers and acquisitions might slow down. I don’t think it’ll ever stop, but you won’t see it in the news every couple of weeks.

Q: How critical is keeping compliant and having a good forms /doc strategy to providing a world-class solution these days?

MARK DEESE: I was at a conference recently, and someone was talking about regulations in 2020. Part of me thought that was so far away, but things are moving so fast. The LOS won’t be around in five years if they don’t keep up with compliance and regulations and having that proper document provider in place. It’s great to have the sizzle, the special enhancement, but if you don’t have the underlying compliance and rules in place to manage that system and manage your loans, as great as it looks, if there’s not an engine under the hood of that car, in a sense, you’re not going anywhere.

Q: Rules changes are happening at a staggering pace. How does COP stay ahead of these changes?

MARK DEESE: When we were at MBA Annual last year we were hearing that some vendors were saying that they would not have a solution for their clients ready in the next 30 days to deal with the January changes. That was a scary thought to me. For us, compliance is always at the top of our roadmap. We are always ready. Not only is compliance always going to be at the top of our roadmap, we’ve also started discovery function to look at future regulations. Complying with a new rule can happen in several different ways, but we at Fiserv want it to happen just one way. We want to incorporate best practices, not one-off practices. We always have a plan well in advance and we communicate that to our clients.

Q: What is COP’s biggest differentiator as you see it?

MARK DEESE: COP is one system that can handle a variety of loan types, that’s our value proposition. We offer one system that handles all of lending. When there’s a mortgage update to COP, that update goes across all of a lender’s channels. They don’t have to wait for the home equity update. Everything is in one system of record.

Q: Looking ahead, what technology does every LOS have to incorporate into the core system to stand out?

MARK DEESE: We are always looking to provide the best customer experience. We want to help our lender clients retain their current customer base by offering them other products that they might need. At the same time, we want to provide our lenders the right tools to expand their customer base, as well. You might have gotten a mortgage one place, but a car loan somewhere else. Why? Your mortgage lender should be able to offer you that car loan and it should be a really simple process. As a result, the lenders gets more business from the same customer and that customer leaves happy, which prompts him or her to tell others about their lender.

Q: When lenders ask about the ROI associated with migrating to COP, what do you tell them?

MARK DEESE: It’s one system to manage and maintain. Why is that important? You’re reducing your IT costs out of the gate. We’re finalizing a project on our side with some of our live customers that did a comparison of their prior LOS to COP. We are asking them: Where’s your time and cost savings? What systems did you eliminate that you were using prior? We’re hoping to have those results before the end of the year. So far the results early on have been astronomical. It’s unbelievable to be able to share that real ROI with the industry.

Q: As lenders look to get more purchase business, how can COP help them capture that business?

MARK DEESE: When we think of cross sales, a lot of times the lender is focused in on that one opportunity, but COP gives the users the ability to add on top of that, to add that second loan on top of a first, or maybe a home-equity loan, or a line of credit on top of a mortgage, or whatever. So, COP helps expand on any lender’s current portfolio. In the end, the system turns shoppers into buyers. And we’re not just talking about expanding a lender’s purchase business, we’re talking about expanding every business channel that lender has.

Q: How would you define an innovative LOS?

MARK DEESE: You have to be able to take things like maintenance, support and configuration and make it easy. A system that is able to be aligned with the lender’s business unit, but at the same time breaks down those walls within most financial institutions is innovative. If you are looking for a loan and you already have a mortgage with that company, you should get a streamlined process and the person you’re dealing with should know you. Innovative technology helps lenders achieve this type of process. When you get instantly approved for a home equity loan from your existing lender and they tell you once you apply, “Hello Mr. Smith, thank you for coming back to us. You’ve been approved and we can close immediately” that turns your bank into your hero.

Q: Why would you say that COP represents the LOS of the future?

MARK DEESE: In strategic business development here at Lending Solutions our goal is to look to the future, and we are on the leading edge with COP. Clients are asking for one system to manage and maintain. That’s what COP is. Other LOS players may be able to provide a fancy document talking about their system, but when a bank or financial institution gets into the weeds, they see that COP is truly one system of record. No other system can show the same results. Other vendors may be talking about providing one system and they may even be in development, but while that system may be out in four, five or six years, COP is already there.

Industry Predictions

Mark Deese thinks:

1.) We are going to see eight or more final rulings on different regulation changes in the next year or so.

2.) Lenders and vendors will become more comfortable with dealing with a lot of regulatory change.

3.) The way to earn new business will change. Ease of use, ease of maintenance and user experience will drive technology investment.

Insider Profile

Mark Deese is Product Manager for Lending Solutions, Fiserv. He has 10 years of experience working with loan originations and as a lender. He is the Product Manager for the Common Origination Platform in Lending Solutions from Fiserv and demonstrates to others how to replicate best in practice methods in loan origination. Mark has extensive experience; from small community lenders to top ten institutions in the country. Beyond lending, he has a vast understanding of financial institution environments and what is required, day in and day out, in the loan originations market.