As a result of the most recent economic crisis, many mortgage companies have turned to IT service providers to improve their processes with increased efficiencies and accuracy.  One of the most salient impacts of the crisis has been the decrease in profit margins due to the cost of maintaining compliance with new regulations and the penalty for underwriting errors.  With the cost of inaccuracy increasing, automated systems are needed to help decrease the risk of human error, assist in mitigating the risk of fraud, and complete complex calculations to attain the full potential of profit in every transaction.  In order for IT service providers to properly position themselves to provide such solutions, it is important to understand the ever changing landscape of the mortgage technology industry.

During a large merger of financial services firms, product rationalization decisions – those concerning product selection, product feature sets, and product pricing, are often based on a number of factors that are emotionally driven instead of being driven by the long-term strategic goals of the firm.   For financial services firms, product rationalization decisions impacting sales force and client attrition, for example, tend to be especially subjective and may pose significant risk to the financial benefits of the integration.

Compliance Lifecycle

Reform, Comply, Report. STOP!!!!

Implementing some form of Regulatory Reform & Compliance Management in an organization could be as simple as the title indicates but rarely is, nor should it be. Quite the opposite, in recent years governing bodies and shareholders have been demanding increased accountability and management transparency resulting in a progressively more complex regulatory environment.

From Brick and Mortar to the Web and Mobile Devices:

What’s Your Channel Integration Strategy?

Remember the good old days when customers walked through a physical door to conduct their business?  Back then companies used to take the time to get to know their customers, train their staff, and provide the right products at the right prices.  Companies were in total control.

Customers loved the service that firms provided, but demanded greater convenience.  Knowing that it was impossible to keep stores open 24x7, firms developed machine surrogates to extend the services provided by staff.  Impressed with their brilliance, companies then started to believe that those machines could also improve efficiency and reduce costs, so they multiplied their retail footprint by placing these automated machines everywhere.

The BASEL III Accord is now requiring immediate action for those financial institutions doing business in the Eurozone, with most elements anticipated to be adopted in some fashion within the US in this decade.  A by-product of this regulatory framework highlights how a financial institution's real-time understanding of the dynamic relationships between assets, liabilities, and cash flow can become a key strategic advantage when deciding how to best allocate these resources to maximize profitability while simultaneously managing risk.  Along with the BASEL Accords, Dodd-Frank is raising the bar for risk management standards, and recently-modified FDIC assessment rules add another consideration necessary to properly balance risk and profitability.  Combined with the reduction of fee opportunities and the likelihood that interest margins will remain thin by historical standards, strategic asset-liability management and pricing are ever more critical to profitability.&nb