Home Trust Speeds Mortgage Application Review Times
When applying for a home mortgage, waiting for the approval to come through can be a very stressful time. Canadian mortgage lender Home Trust understands this well, which is why a goal of the company’s recent SAP implementation was to provide its customers with information about their mortgage applications as quickly as possible.
Today, Home Trust customers are getting word on the status of their mortgage applications much faster than they could in the legacy environment. And, thanks to the implementation, the company is also improving its financial forecasting and risk management capabilities.
The project exemplifies the broad benefits that become possible when the IT and business teams work closely to implement an IT platform that addresses both internal and customer-facing business processes.
Achieving Speed and Control
Over the past 15 years, Home Trust has seen steady and enviable growth, ultimately doubling its assets and capital every three to four years. For a while, the business’s existing IT infrastructure was able to carry the increased load effectively. But in recent years, business leaders at Home Trust began to realize that its inflexible legacy system was slowing some of its customer-facing processes — including mortgage application reviews — and also hindering Home Trust’s ability to launch new products or variations on existing products to capitalize on market trends.
Martin Reid, President of Home Trust, explains that the business had limited control over developments or enhancements with the legacy system. “Any time we wanted to offer our customer base a new product, our software developers had to modify the system first,” he says. “That often took a long time and was not the most efficient way to release new or improved products.”
Rather than risk Home Trust missing opportunities at a crucial time in its development, executives decided to replace the decade-old IT system; Reid and CIO Sanjiv Purba led a review of the market to find a suitable replacement. “We wanted a more flexible and robust platform that would give us more control over our IT strategy,” says Reid.
Specifically, Home Trust wanted a system that offered modularity — a system that could easily grow and change with the business and not require major development work each time something was changed or added.
The challenge, they found, was finding a single system that provided both the front-end, customer-facing functionality required in the banking industry, as well as the back-end financial capabilities to help streamline the business.
“We did look at using separate systems for the front-end and back-end functions, but our preference was one platform,” says Reid. “We knew there was a benefit to having a single system rather than having to integrate different systems.”
“Making business easier for the broker community, our primary customers, is an effective way to expand our business reach. With this new solid IT foundation in place, we can move into some new business areas.”
— Martin Reid, President,
Quick, Customer-Focused Returns
Home Trust decided SAP for Banking was the solution that would provide the flexibility and dual functionality to help the company grow. After some initial customization work to ensure the new system complied with Canadian regulations, Home Trust went live with SAP for Banking in July 2011 and began seeing process improvements from day one.
For example, before the implementation, mortgage brokers had to mail or fax applications to Home Trust, where the information was then manually entered into the legacy system. In the meantime, a nervous mortgage applicant would await a response while the correct person within Home Trust was identified and manually sent the application for review.
Now with SAP for Banking, brokers can submit applications electronically and then automatically route them to the correct contact in Home Trust. This eliminates two manual steps and gets the application to the right person for review more quickly. And, perhaps most importantly, end customers — the mortgage applicants — get word on their applications sooner.
Automating a couple of steps is only the first wave of improvement to this all-important process at Home Trust. In 2012, Home Trust will roll out a portal based on its SAP Customer Relationship Management (SAP CRM) application that will let mortgage brokers log in and gain real-time access to the status of their clients’ mortgage applications.
“In the past, brokers would have to call the office and speak with someone to get that information, which requires additional resources on our part to service those calls,” says Reid. “The portal lets brokers check the status on their own and get the information at their convenience. If their application is missing information, they will know it sooner, and we’ll have a better information trail about each mortgage and the decisions that were made.”
Long term, the new SAP landscape’s modularity allows Home Trust to add more functionality — both external and internal — at its own pace instead of having to deploy everything at once, which provides both customer-facing and internal benefits. The company plans to implement SAP BusinessObjects Planning and Consolidation in the near future to streamline its financial planning and forecasting processes.
“From there, we will be able to implement SAP Bank Analyzer, which will give us the ability to track how we perform against our forecasts using real-time data coming from the core SAP applications,” says Purba. “We will be able to forecast our business, run our business, and measure how our business performed all on a single platform.”
“In the past, we might not get a month-end report on our risk until three weeks after the month’s end. Now, we can get that report within about five business days.”
— Sanjiv Purba, CIO, Home Trust
Having all of its business data in a single place also improves Home Trust’s ability to analyze its risk portfolio, a very important business process in the mortgage and banking industry. Home Trust uses a third-party solution to analyze risk data, such as when mortgages are paid and how much money is lent against each property, to develop a risk profile for the business as a whole.
In the previous environment, that data came from multiple sources, including spreadsheets, which was an error-prone and inefficient business process. But in the new environment, that data is sent directly from the SAP system to quickly render statistics in dashboards and provide a visual overview of the company’s risk profile.
“In the past, we might not get a month-end report on our risk until three weeks after the month’s end,” says Purba. “Now, we can get that report within about five business days. We can identify any potential risks in our portfolio much sooner in this system than in the legacy environment. We can also validate that we’re running our business in a healthy fashion, so when we go to our investors or regulators, we can show them our risk targets and where we fall within those targets.”
Mortgage Brokering Goes Mobile
Home Trust also plans to roll out mobile capabilities to both its customers and internal SAP users. Once SAP Bank Analyzer is up and running, a mobile version of some of that functionality will be offered to company executives on tablet devices. The company is planning more customer-facing mobile capabilities for the future. Just as the portal will make it easier for mortgage brokers to access information about their clients’ applications, Home Trust plans to use mobile functionality to make that process even more convenient for its customers. Not only would brokers be able to access the latest information anytime they want, but they could do it from anywhere.
All of these improvements and enhancements are making Home Trust’s executive team more confident about the company’s growth position going forward. Where there was concern before about limitations, today there is only optimism and enthusiasm.
“With this new solid IT foundation in place, we can move into new business areas we are not working in right now,” says Reid. “Reaching out and making business easier for the broker community, our primary customers, is an effective way to expand our business reach. We’re much more comfortable growing our business with this new system and will be able to take advantage of new opportunities as they arise.”
April 01, 2012