In any paper-intensive process, filing and record keeping are tedious tasks that often get postponed. The mortgage industry is no exception. The strict regulatory environment and importance of documents in the mortgage lending process makes records management technology a critical tool to ensuring compliance with regulatory requirements and effective customer service for our industry. Unfortunately, finding the right solution has proven challenging for most organizations.
Reduce your risk
Most companies don't have a solid handle on records management requirements. According to a study conducted by Cohasset Associates, a leading management consulting company specializing in records management and document imaging systems, 41 percent of companies surveyed considered the effectiveness of their records management systems only marginal or fair.
On top of that, 62 percent of respondents were not at all or only slightly confident that they could demonstrate the accuracy, reliability and trustworthiness of electronic records over time. With regulations ranging from the Fair Credit Reporting Act to Sarbanes-Oxley to state and county requirements, mortgage lenders are equally overwhelmed.
The answer to our records management worries lies in the trend towards paperless processing, business process management and the use of digital documents. Integrating an effective records management system into an operation with business process management technology already in place is relatively seamless. By combining a rock-solid, tamper-proof digital content repository with records and retention management-focused business rules and process functionality, mortgage lenders can leverage operational investments to enhance compliance with regulatory requirements.
Today's process-driven systems can automatically capture all kinds of documentation, including e-mails, faxes and employee created documents. But, companies must remember that the record itself is not the only thing that must be retained.
Regulatory institutions are now reviewing the processes by which records are created to ensure that fraud or other illegal activities have not occurred in the creation or maintenance of the transaction. Just having the paper files on the shelf is no longer sufficient. You must retain all associated content and related metadata to ensure a reliable audit trail for all of your records. Process-driven records management makes this easy.
Beyond complying with regulatory requirements, an effective process-driven records management system can also help you improve the profitability of your mortgages.
At the same time, it ensures a reliable audit trail. An effective back-end repository managed by solid business rules and process management facilitates faster underwriting turn times, an increase in trading cycles on the back end, and an improvement in the price of the underlying collateral and securities.
By capturing records as part of the mortgage origination and servicing workflow, automated process-based records management systems integrate seamlessly in the lending process and remove the risk from the hands of business users, while enabling savings during audits or if a legal issue arises. Bulletin reporting tools provide a history of each transaction throughout its lifecycle and can serve as effective evidence in legal disputes or streamline the external audit process.
Business process automation and electronic content management have had a dramatic impact on the mortgage industry in balancing underwriting workloads, eliminating costly paper storage, speeding closing and servicing requests, and improving product profitability. Applying these capabilities to records management requirements is an obvious next step. The benefits of an automated records management process are clear-reduced risk, error elimination and the peace of mind that comes with knowing records management has become a systematic process across your financial institution.
William Neale is a subject matter expert in records management for FileNet Corp.
