Souren Sarkar: Smart Data Fabric Could Drive Mortgage Industry to Next Level – MortgageOrb

Person of the Week: Data is the lifeblood of today’s mortgage process. Without data, mortgage origination and servicing would be impossible.

This claim has always been true, and even in the old days when mortgages were entirely paper-based, people still had to fill out application forms with numbers and information, but multiple data sources were used by lenders to process loans. This is especially true today with the use of

And there is exponentially more data available.

Effectively managing all that data is the new focus. Lenders must ensure that they are using the best and most accurate data available when processing loans. Otherwise, you face the risk of buybacks and increased defaults. Additionally, you need to ensure that you are using your data assets effectively to reduce costs. Similarly, servicers are tasked with maximizing the use of data for their investor clients.

To learn more about how lenders and servicers are using data and the data-related challenges they face, mortgage orb I recently interviewed Souren Sarkar, president and co-founder. Nexvalis a provider of technology-enabled mortgage services and fintech innovations for the financial services industry and a pioneer in mortgage business process outsourcing (BPO).

Q: What are the issues the mortgage industry struggles with when it comes to leveraging available data?

Sirker: There are some important issues. First, lenders and servicers manage vast amounts of data from far more diverse sources than any other industry. Borrower data, loan data, real estate data, valuation data, title data, investor guidelines, the list goes on and on. A second problem is that the information systems used in the mortgage industry have been built over decades, leaving a large amount of data in databases that have not been updated for quite some time. Third, just like in an evolving industry like ours, things change. The basic mortgage process remains the same, but as many aspects of operations have changed, from regulation and compliance to how the secondary market operates, so has the way that data is used.

Q: Why do you think the industry is still grappling with the data problem?

Sirker: The mortgage industry moves slowly, but at the same time there are many deals. This leads to a data monopoly, with a handful of mortgage banking systems controlling most of the borrower’s data. In fact, a major origination platform and a major service platform were recently acquired by the same company. Having data exclusivity is great for business. Because the controlling entity can charge people for their data. At the same time, with little incentive to change, most of these monolithic systems have not evolved fast enough to keep up with new regulations, investor guidelines, and markets.

There are also many drop-off and pick-up points within the industry where the data is further split into chunks and resides in various multiple systems. Some technology providers, in desperation, build auxiliary systems that rely on larger systems. However, this often makes the data more difficult to manipulate. This disparate situation of a large monolithic system with many duct tape systems hanging around created a very complicated scenario that was hard to get out of.

The industry’s overall lack of innovation makes it very difficult to change how the industry uses data. Operationalizing data and making it strategically valuable is usually an afterthought. In most cases, data is handled by people and teams focused on individual issues, whether it is borrower verification or escrow. But nobody stops considering the overall impact of adding new data fields on the overall operation. Everyone is constantly spinning their wheels to keep up with the sheer volume of data.

Q: What exactly is Smart Data Fabric?

Sirker: A smart data fabric is essentially an architecture of data services and standardized data management practices across an organization, typically including cloud environments and intelligent, automated systems. Instead of using individual data storage systems, smart data fabrics leverage data services and APIs to retrieve data from different areas of the business and give organizations a more holistic view of the data.

A smart data fabric is built on the concept that data is the core asset of any enterprise. The idea is to build a data architecture from scratch. For example, in a data warehouse, lenders take data from everywhere and try to make sense of it. With a smart data fabric, lenders are building the ability to organize their data in an easy-to-use way. All participants in the organization are free to share data and have some degree of standardization. Building functional data within an organization, and ideally across industries.

Q: How will the smart data fabric help my mortgage business?

Sirker: A smart data fabric will benefit any mortgage organization, but it will be especially valuable for servicers. For example, most servicers have a core system that they use for all their business. When you onboard a loan, it comes in and registers and sends a message to the system. However, the servicer may have specific systems or modules for default administration, foreclosure, and third party his provider communications, all of which may be vendor driven.

In the current process, all these systems and their users are constantly pulling data or data fields from the same core system for various uses. Not only is this a lot of manual work that must be repeated over and over, errors can occur every time someone touches the data. With a smart data fabric, servicers can create a distributed database to free servicers from this deadlock and organize data to accommodate changes in data points and data fields.

Ultimately, the smart data fabric is what will take the industry to the next level.

That said, driving a smart data fabric must start at the C-suite. If a company has innovators on staff, they should have a voice and be given the opportunity to pursue their ideas. At most lenders, the chief underwriter usually has more power than the innovator. As such, many mortgage lenders would be better off reaching out to third-party service providers who can provide a holistic view of their organization and build accelerators and proofs of concept for their smart data fabric.

Q: How can the smart data fabric power AI in the mortgage sector going forward?

Sirker: Smart data fabrics and AI go hand in hand. Structuring data in a usable way is important for any AI system. So systems can access that data, use it to make actionable decisions, and execute predefined processes. But every AI system relies on good data. If a lender has bad data, it’s better to put a human in place. But, of course, that can also be a problem. Because humans too often rely on intuition when making decisions.

The bottom line is that organizations thrive when data becomes information, not data. Organizations thrive when they can make real predictions and view problems at high and low levels without creating another system or taxing IT resources to essentially build another mousetrap. I can do it. It’s important to use a smart data fabric to move forward what lenders are building today, make small changes, and slowly transform over time.

The key is to understand that your data is your business. Once that realization begins, change can happen.

Leave a Comment