4 Reasons Mortgage Companies Should Consider Building a Data Exchange Platform

June 21, 2022

You’ve likely heard the saying that data is the new oil. That’s not quite true. Data is far more plentiful than oil and it’s constantly increasing in volume. What the two commodities do share, though, is that, to power businesses, they require extraction and refinement.

Most mortgage businesses have processes in place to perform those functions, but they’re often slow, labor intensive, and expensive. As a result, much of the value of the raw data is lost before it can have a meaningful impact on the business.

The good news: there’s a solution. A data exchange platform relies on modern infrastructure and architecture to translate ever-growing data into valuable business insights, for both internal and external stakeholders. Here’s a look at how a data exchange platform can benefit businesses in the mortgage industry.

Background: What Is a Data Exchange Platform?

In some ways, the name says it all: a data exchange platform is an environment where data from various sources can be curated and then exchanged among various data consumers.

But that doesn’t illustrate quite how dramatically introducing a data exchange platform can change a mortgage business. So let’s look at an analogy.

Imagine if you had to source food directly from farmers and other food producers. You’d have to spend an incredible amount of time and energy just getting the food from the field into a form you could actually eat. And it would be so labor-intensive, you’d likely stick to just a few products you could reliably manipulate.

That’s what it’s like to operate without a data exchange. Development resources are scarce, making changes can be labor-intensive, and the ability to take on new “data crops” becomes very difficult because of the effort needed to maintain and manage them. 

Now think about what it’s like to go to the grocery store: experts build and maintain systems that let food flow from fields to processing facilities and onto shelves, so you can make a single trip and get whatever you need or want to eat. It saves you tremendous time and yields much tastier, more nutritious, and more interesting meals.

A data exchange platform yields similar improvements in accessibility, cost effectiveness, and functional variety. What’s more, just as anyone can visit a grocery store, mortgage businesses can make their data exchange platforms available to anyone within the organization as well as a variety of third-party partners – title companies, insurance providers, etc. – who can benefit from their data.

Want more details? Download Data Sharing for Dummies

Now let’s look at four concrete benefits mortgage companies can enjoy when they build a data exchange platform.

1. Improved Data Quality and Accuracy

Without a data exchange platform in place, the process of moving data from where it exists in various silos (CRMs, software applications, third-party sources, etc.) to where it can guide business decisions is complex.

IT professionals may have to first download data from email, an FTP system, a portal, or similar. Assuming nothing gets corrupted in transit, the IT team then has to deduplicate the data, clean it, and standardize it so it’s usable. 

If something does go wrong with the transport or provided feed, the team has to do root cause analysis, determine what went wrong, and figure out how to fix it.

By the time the data’s ready to use, it’s likely already outdated.

What’s more, each person or group receiving data may have different needs: different scheduled jobs or workflows the data must be sent to, different endpoints to manage, a variety of reports depending on that data, etc. Tracking and managing changes to all these components can become cumbersome and costly as recipients are added or removed, new fields are added or removed, and other changes occur across the data’s lifecycle and lineage.

With a data exchange platform, stakeholders from around your company and from partner organizations can access data in real time. With everyone pulling from the same source, there are fewer version control issues. And because of how easy data exchanges make it to pull data, there’s far less risk of introducing errors. Let’s talk more about that ease of access.

2. Lower Cost of Access

While the initial setup of a data exchange platform requires technical expertise, a functioning platform requires far less human effort to use on an ongoing basis than the systems most mortgage companies have today.

Business users across your organization and your partners’ can independently interrogate the data to fuel their day-to-day decisions – without extra help from the IT team, and with fewer requests to manage in the data development backlog. This can translate to significant labor (and therefore cost) savings, while simultaneously leading to better business outcomes. A few examples of how this might manifest:

  • Rather than building daily or weekly data exports, your IT team could set up a data exchange to automatically enable your data consumers to populate reports. These might show loan completion rates, loan age, current status of active loans, and more.
  • As data is generated, your CRM could pull it in to create a 360-degree view of your customers to improve outreach and engagement leveraging data from other stakeholder groups to the mortgage process such as appraisers, insurers, real estate agents, etc.
  • A title company you partner with could tap into your data exchange platform to auto-populate borrower information in title applications to streamline their processes and improve customer experience while ensuring data accuracy and timeliness.

Crucially, the data exchange platform setup is also scalable in a way that more manual alternatives are not. New data is constantly being created; with a data exchange platform, all of it can contribute to the work of improving your operations.

3. Machine Learning to Drive Business Decisions

That scalability is particularly visible in the context of using machine learning (ML) to improve business outcomes, thanks to something called a feature store.

To understand what a feature store is, let’s return to the grocery store analogy. 

Imagine that grocery store with every food you could possibly want – but there without standardized food labels. Anyone who wanted to make a specific recipe would have to do a lot of work to ensure they bought the correct ingredients to create the dish they wanted – especially for specialty diets or those with allergies.

A feature store is a bit like a uniform labeling system: it transforms, validates, and aggregates data so that it’s ready for data scientists to use to build predictive models. The feature store also makes data widely shareable and accessible.

There’s a cliché that 80 percent of the work of data science is wrangling data; that’s true for data scientists working without a feature store. Those whose work is supported by a feature store can be significantly more productive, as they can focus on building models rather than cleaning data.

In the mortgage world, ML models might predict closure rates for various leads or let you more accurately evaluate risk. They might help suggest next best actions for busy loan officers. In fact, there’s no shortage of ways ML models might improve your operations – and with a feature store and NTERSOL’s help, your team can build and test better models more quickly.

4. Data Monetization

Most mortgage firms are familiar with being on the consumer side of data monetization – that is, they regularly pay for data of all kinds to inform lead scoring, risk assessment, and other business functions.

With a data exchange platform in place, mortgage firms can become the data provider, selling access to their data. It’s standard practice to provide data access on a subscription basis, which means mortgage companies can turn their data into a source of recurring revenue.

A few other ways mortgage firms can provide value to common stakeholder groups:

  • Aggregating and providing benchmarks
  • Creating new market indices
  • Projecting future growth using existing industry metrics

This valuable information can become a new revenue stream that will help stakeholders better predict future business while also leveraging data localized to data within their markets. What’s more, if you choose to publish this data on your website (say, a monthly market index), you can establish yourself as a go-to industry source, which could yield inbound links, organic traffic, and ultimately leads.

In the Mortgage Industry, a Data Exchange Platform Can Provide a Significant Competitive Edge

Increasingly, mortgage companies are competing with tech firms (Rocket, loanDepot). Today’s mortgage customers expect the kinds of streamlined, efficient experiences made possible by a modern tech stack.

A data exchange platform is a key piece of infrastructure that can power internal efficiencies and external partnerships and drive business decisions at every level. If you’re interested in learning more about what goes into building a data exchange platform and what it might look like at your organization, get in touch.

Author: Christopher Cronk
About: Christopher Cronk is Vice President and Managing Director of Data and Analytics at NTERSOL. He is an award-winning data and analytics executive with approximately 20 years of experience in professional services, management consulting, data, and analytics. Mr. Cronk has worked extensively across multiple industries including Communications, Financial Services, Insurance. Healthcare & Pharmaceuticals, Retail, Media, High Technology, and Automotive and has helped many Fortune 500 companies strategize, implement, quantify, and realize millions in ROI on their technology, data, and analytical investments.