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New Entrants Are On The Way

The market is getting ready for the digital mortgage. Sluggish market conditions continue as predictions show that mortgage rates will tick higher and average 4.60 percent for the year. Additionally, in July, sales of previously-owned homes fell for the fifth straight month, below year-ago levels. With rising mortgage rates and decreasing home sales coupled with fierce competition in the market, the process and its regulation are triggering innovation to help consumers find the best mortgage deal.

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Digitizing the home-buying process is needed for traditional players to compete with non-traditional players disrupting the mortgages market. The mortgage application system in part remains phone and paper-based which slows down the application cycle. Updating underperforming and costly core-banking systems are a strategic priority for traditional mortgage providers as they compete against fintech and challenger banks.

In an effort to help traditional mortgage providers improve customer experience, new players are entering. For example, Intelenet Global Services have launched a new Lending Suite with their banking clients. Using this AI & Automation based initiative, banks can generate mortgage offers in 30 minutes. The Lending Suite is interoperable with banks existing legacy systems which prove inflexible, reducing processing time by 40 percent and costs by 50 percent.

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Crucially, this solution integrates with existing core systems to deliver significant speed and accuracy improvements without the need to replace current infrastructure. This is important given that less than 30 percent of first-generation Core Banking Systems (CBS) replacements succeed, according to McKinsey.

Nitin Sahni, Director Corporate Services at Intelenet Global Service says, “Consumers are constantly searching for the best deals to enable them to invest in their dream home as quickly as possible. The last thing a customer wants is for this landmark time in their life to be tainted by long waits and arduous processes to get things moving.

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“Revamping the core banking system seem daunting for banks who recognize there is a need to change their system but are deterred from the exorbitant implementation costs. Totally replacing the core business systems, which largely underpin all banking operations is not feasible. Firms are looking for solutions to cut costs and processing times which fit alongside these systems.”

Nitin continued, “Speeding up processes will help traditional mortgage providers retain and expand market share while delivering the best possible customer experience.”

Intelenet Global Services is a global Business Process Services player. Intelenet offers a range of integrated BPM services to deliver benefits to clients through optimized costs, ongoing productivity improvements, and process re-engineering. The organization is committed to delivering its client’s strategic goals and helping in enhancing, broadening, and deepening the relationship to add value.

And it doesn’t end here. My guess is that more new players will be entering the space to help lenders digitize. Hopefully this trend means that lenders are willing to embrace this technology. We’ll just have to wait and see.

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Not All Banking Interactions Of The Future Will Be Handled By Bots

With Mastercard Inc. set to release its first-quarter financial results, and Finovate Spring 2018 approaching next week, fintech continues to lead the disruption charge in banking. US banks remain under pressure to stay ahead of what’s in store during the next wave of innovation, which is being led by AI advancements in the industry.

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Gartner’s research shows the global banking industry will spend $519 billion on IT in 2018, up 4.1 percent year over year from $499 billion in 2017. Features like chatbots are changing banks’ relationships with customers, and digital players are increasingly integrating social media to interact with clients.

But despite the increase in technology adoption in the sector, the need for human contact persists, with voice recognition and chatbot technology still in its infancy.

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Traditional banks must heavily invest in upgrading contact center environments to accommodate anticipated customer needs, in conjunction with embracing advanced technology platforms.

Banks can reap the benefits of AI and automation to improve interactions between staff and customers, says Intelenet Global Services, whose tech innovations for banks have seen them win recognition in the 2017 IDC Fintech Rankings.

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Tony Antenucci, VP of Banking, Financial Services and Insurance for Intelenet Global Services, comments: “The way customers interact with their bank in the U.S. is changing, as branches close down and more people switch to online banking, communicating through contact centers via phone or online if they need more help.

“Keeping up with new technology is vital to keep the processes behind these operations running smoothly and maintaining a relationship between banks and their customers. AI tools can help personalize banking for the customer, and automated processes free up staff to focus more on customer service and complex question resolution.

Tony continues: “For example, voice-recognition programs can automatically recognize an individual by their voice, predicting the subject of a call before the customer has to explain it. Each customer can be automatically sent to the right department, or the person they spoke to before, without having to be passed between contact staff.

“This dramatically improves the experience for the consumer. One leading bank was able to reduce the average handling time for customer calls by 40 percent.

“Banks will need to keep up this lead in innovative technology, to fend off growing competition for customers from Fintech challengers.”

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Uber-Like Tool Hits U.S. Banking

U.S. banks continue to follow a trend of closing branches as the introduction of innovative technologies are making branches less relevant among consumers.  According to a 2015 Accenture report on the future of banking, which surveyed over 4,000 American consumers in the US and Canada, only 19 percent of the respondents said they would switch banks if their local branch was shuttered, compared with 48 percent in a survey taken two years earlier.

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The Accenture survey also found that digital-savvy Millennials showed less loyalty to branch banking that was nearly double the average of other age groups, ostensibly reflecting a trend among Millennials seeking  the speed and convenience of digital banking rather than making visits to bank branches. Eighteen percent of Millennials, between the ages of 18 and 34, switched banks within the past 12 months, compared with 10 percent of customers between the ages of 35 and 54 and 3 percent of those 55 years or older, the survey said.

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Automation also is being used by banks as a cost-cutting tool, putting bank branches on the chopping block.  Former Barclays CEO Anthony Jenkins was quoted in a speech last fall that the global banking industry will slash employment and branches by 20 percent to 50 percent over the next decade. Jenkins’ forecast was supported by a Citi research report that the number of US bank branches would be eliminated by more than one-third within this decade.

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But traditional banks shouldnot simply close branches as automation reduces the need for brick-and-mortar facilities, according to the Business Process Outsourcer, Intelenet Global Services. Instead, they must consider ways to maximize their adviser networks, utilizing next-generation technologies to transform the nature of the branch instead of eliminating them.

One of these innovations is Radius, an Uber-like scheduling tool that is now being used in the banking sector. The technology enables companies to allocate mobile teams to nearby appointments, creating the potential to transform the banking business model for face-to-face interaction.

Bhupender Singh, CEO of Intelenet Global Services, says: “We are excited about the possibilities that Radius offers to modernize the branch banking model. Empowering banks to connect roaming advisers to nearby customers when and where they are needed, the tool would ensure the ongoing provision of an in-person service. With just the help of a simple mobile app, the costly outlay of a branch network could be sidestepped without reducing customer service.

Singh added: “In general, the past years have seen the explosion of online banking services, many of which are completed without any human interaction. Unfortunately, some customer segments are being left behind by this shift, and the majority of consumers, ranging across demographics, still crave a face-to-face service when making major financial decisions. Some challenger banks are bucking the trend, finding success by combining technology which improves the speed of their service, with efforts to build a branch network. One of our projects with amajor mortgage provider resulted in a reduction in mortgage approval time from 11 days to 48 hours. This has enabled them to make the back-office savings which can be redirected to the front-end of customer service.”