The benefits of big data have been slow to arrive in the mortgage industry. But they hold great potential in this data-rich business, especially in compliance.
The aggregation of vast amounts of information and employing innovative methods of processing and analysis for enhanced insight, decision-making and process automation--or "big data" for short--has produced revolutionary, transformative changes in many fields and industries. [paragraph] The ability to find patterns, anomalies or even completely new arrangements within otherwise chaotic or complex data sets is already delivering incredible dividends in health care, energy efficiency, manufacturing, supply-chain management, urban transportation and city planning. The list of industries that benefit from big data goes on, and will only continue to grow. [paragraph] Consumers, in particular, have been profoundly impacted by the influences of big data--via Amazon, Netflix, Google[TM] and so many other touch points. Most are probably unaware of the degree to which big data aids and improves their day-to-day existence--and how many decisions are made on their behalf--behind the scenes by algorithms with transparent logic. [paragraph] The fact is that life in the 21st century is being increasingly and irrevocably shaped by the influence of big data.
The mortgage industry lags
The mortgage industry has been much slower to reap the benefits of big data. This is surprising, especially when one considers the breadth and depth of the data the industry accumulates in the course of doing business--not to mention the degree to which it relies on the accurate processing and analysis of that data to function properly.
When you add in the costs and risks associated with regulatory compliance, and consider the incredible potential that exists in bringing the capabilities of big data to bear on the challenge of regulatory compliance, the lack of adoption becomes even more puzzling.
Recently, however, there have been some moves by industry leaders to bring together various, seemingly disconnected tools, platforms and data sources--and more importantly, to encourage and enable free-flowing interchange between them.
While this undertaking is enormous, the goal itself is simple: to bring the power and promise of big data to lenders, servicers, investors and other mortgage industry professionals. Success on this front can easily be as transformative to the industry as automated underwriting systems and predictive analytics modeling have been.
The key is pulling together multiple, disparate data sources--e.g., a lender's own loan and borrower data, whether from origination or servicing systems, or both; large-scale contributory mortgage industry performance data sets; massive public records property information databases; and any number of third-party databases.
When done correctly, the result is not only faster, more accurate analysis, but also better decision-making, improved efficiency and increased transparency into previously unavailable insights.
Achieving compliance the big data way
When it comes to regulatory...