Accenture Credit Services. High Performance for the Residential Mortgage Industry

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1 Accenture Credit Services High Performance for the Residential Mortgage Industry

2 Residential Mortgage Operational Performance is Insufficient to Meet the Challenges of the Market The challenges of complex, paper-intensive processes, the lack of updated workflow technology, increasing regulatory and compliance requirements, credit and policy risk aversion, and ambiguous investor guidelines cause most lending processes to be characterized as slow, inaccurate, inefficient and costly. On top of that, Lenders have to be able to demonstrate the ability to meet evolving borrower expectations and provide a differentiated customer experience. In addition to closing timeframes, borrower expectations are now heavily focused on transparency, ease of access and communication with the lender. A new class of digitally enabled home loan borrowers, along with commodity loan products and pricing and lackluster customer loyalty are putting pressure on lenders to make the move to a more digital mortgage experience. There are also significant internal challenges that lenders must overcome. The net cost to originate a residential mortgage has increased dramatically since year-end 2009, including seeing a steady rise over the past five quarters. Obstacles such as aging technology, lack of flexibility to meet market dynamics, and fragmented processes, all limit lenders ability to drive efficiency. Total Net Cost to Originate Residential Mortgage Loans Based on Un-weighted AveragesFor Non-Depository US Companies $5,171 Net loan production operating cost ($) Period average $3,539 $3,513 $3,360 $3,324 $3,413 $3,224 $3,353 $2,945 $2,610 $2,722 $2,827 $3,813 $4,182 $4,207 $4,573 $3,414 $2, Q Q Q Q Q Q Q Q Q Q Q Q Period average Source: Quarterly MBA Performance Report The U.S. mortgage industry is entering an era in which efficiency, speed and the customer experience will be more crucial than ever in determining winners and losers. 2

3 Focusing on Solutions for High Performance Accenture Credit Services is focused on helping our clients achieve sustainable competitive advantage in the market by applying the discipline and rigor of lean manufacturing practices, next generation technology and process ingenuity to operations and service delivery. Accenture Credit Services provides solutions that increase quality, lower cost, raise service levels, and decrease delivery cycle times while answering residential mortgage industry challenges such as: Providing flexible workflow solutions to meet regulatory compliance Lowering the internal cost of service operations by 25 percent Improving customer service, building brand loyalty, and increasing customer retention Manufacturing defect-free loans and reducing repurchase risk Reducing cycle times to less than 30 days to ensure a stress free borrower experience Accenture Credit Services consulting and advisory services help clients tackle their dynamic and complex business challenges today while designing solutions for the future. Accenture Credit Services outsourcing capability is characterized by an industrialized, high performance, lean manufacturing delivery model intended to offer clients better speed, scale, savings, and flexibility than they could achieve internally. Industry Leader: Independent analysts (HfS) rated Accenture at the top of Mortgage BPO vendors with one of the broadest delivery networks and scale Cycle times: faster turnaround times 85 percent or more conformance to target closing date Cost reduction and productivity yield: continuous process improvement leveraging market leading consulting, systems integration, processing, and software capabilities Customer service: high-touch service average percent top-tier customer satisfaction scores Compliance: with industry leading license coverage in 49 states plus DC, and a growing number of approved licenses for our state of the art operations center in Chennai, India, Accenture Credit Services is a demonstrably SAFE Act-compliant onshore and offshore service provider Flexibility: know-how to design and deploy rapid solutions for just-in-time component business solutions designed to meet the unique capacity or service delivery challenges of any business Technology: industry leading proprietary technology that powers our operation to provide efficient workflow, superior in-line processing quality, rules based image enabled loan doc management, loan officer and borrower status dashboards, and analytics Accenture s right-shore delivery model drives efficiency measured in faster cycle times and lower cost per loan. 3

4 Accenture Credit Services: Transforming the Credit Industry Accenture Credit Services is a full-service capability that provides support for institutions in the residential and commercial mortgage, leasing, and automotive finance industries. It enables credit service providers to significantly improve quality, costs, service levels, and delivery cycle times with a full range of consulting, systems integration, proprietary software and large-scale business process outsourcing services. More than 100 major lending institutions worldwide currently rely on Accenture services. In November 2011, Accenture acquired Zenta a market leader in residential mortgage and commercial real estate services in North America. The acquisition expanded Accenture s ability to help mortgage lenders restructure and retool their operations to respond to market demands and optimize profitability. In July 2013, Accenture further expanded its mortgage industry capabilities with the acquisition of Mortgage Cadence a leading provider of loan origination software and electronic document management services in the United States. Because the software is rules-based and highly configurable, it helps lenders: Accelerate new product introductions More easily adapt to changing regulatory requirements Reduce overall cost structures By combining Mortgage Cadence technology with our industry leading mortgage processing model, Accenture Credit Services delivers stronger controls, improved quality, and enhanced customer satisfaction using an analytic-driven work-flow. To support the evolution of borrower behaviors and the demand for a more transparent and accessible process, Accenture Credit Services has integrated mobile solutions, analytics and digital capabilities into our suite of solutions. We recognize that exceptional borrower service throughout the home buying journey is critical to the success of our lender clients and are committed to providing each and every customer the best experience. Accenture Mortgage Cadence technology enables Accenture Credit Services to enhance its end-to-end capabilities with a core loan origination platform to process mortgages on behalf of its outsourcing clients. Accenture also invests in and provides the software to lenders on a standalone basis as part of its banking software portfolio. 4

5 Accenture Credit Services: A Leader in the Industry Accenture Credit Services was positioned by one of the leading BPO research firms, HfS (Horses for Sources), in the Winner s Circle of its Mortgage BPO Blueprint. Accenture led all other service providers for the depth of capabilities in delivering both origination and servicing processes for large clients. HfS Blueprint 2014: Mortgage Services BPO Innovation Winner s Circle High Performers WNS Wipro TCS Accenture IBM ISGN Xerox Sutherland Cognizant Genpact Infosys EXL Firstsource igate Execution 5

6 Accenture Credit Service Components Accenture Credit Services provides consulting, technology, as well as process management and business process outsourcing services to help clients improve quality, cost, service, and delivery performance outcomes. Consulting: Target operating model design and lending strategy definition; mortgage process re-engineering; outsourcing strategies; KPI analysis, time and quality studies, benchmarking; organizational redesign; residential mortgage learning development and policy/procedure definition Technology Software: Supporting mortgage origination, processing, underwriting, closing and post-closing with on-premise, software-as-a-service (SaaS) and cloudbased solutions; electronic mortgage document management systems and imaging solutions Technology Systems Integration: Loan Origination System (LOS) analysis, design and installation; workflow and imaging analyses, design and installation; ancillary system analysis, design and installation (Automated Underwriting Systems, Workflow/Imaging, Document Engines) Outsourcing: End-to-end fulfillment (processing, underwriting, closing); component-based underwriting; postclosing services Through this full range of solutions and services, Accenture Credit Services can help deliver material operational performance improvements including: 25 percent reduction in origination fulfillment costs 15 day cycle time reductions Less than 1 percent loan quality defect rates Loan quality results with compliance scores of 99.5 percent or greater Top quartile customer service scores How Accenture Credit Services Can Help Accenture is uniquely qualified to help lenders and servicers industrialize their manufacturing operations to meet current and anticipated challenges by leveraging its unique capabilities: deep lending domain expertise, systems integration and management, software and large-scale process outsourcing flexibility. Accenture Credit Services is a full-service provider of residential mortgage transformation services. We team with clients to deliver high performance operating environments that bring performance improvements in quality, cost, service and delivery. Terry Moore Global Managing Director, Accenture Credit Services terry.l.moore@accenture.com Ghazale Johnston Managing Director, Accenture Credit Services, North America ghazale.johnston@accenture.com Or visit: accenture.com/residentialmortgage For more information on how Accenture can help your organization, please contact: 6

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8 About Accenture Accenture is a global management consulting, technology services and outsourcing company, with more than 305,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world s most successful companies, Accenture collaborates with clients to help them become highperformance businesses and governments. The company generated net revenues of US$30.0 billion for the fiscal year ended Aug. 31, Its home page is Copyright 2014 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.