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Modernize your mortgage lending platform

Lending platform transformation makes the mortgage process more efficient and effective for the borrower, lender and all closing parties.

In brief
  • Evolving customer requirements and increased competition spurred by new market entrants drive banks to transform their mortgage lending platforms.
  • Lending platform modernization creates a flexible infrastructure and methodology that can deliver lasting sustainability and improved operational efficiency.

For many years, consumer banks have recognized the need to modernize their core lending platforms. This need deepened multifold since the onset of the COVID-19 pandemic with new and rapidly evolving customer expectations forcing banks to accelerate their transformation agendas. Customers across all age groups have become more sophisticated and competent in using digital tools and are demanding intuitive and personalized digital interactions from consumer banks.

Current share of channel interactions with primary financial relationship

Calculated based on % frequency of usage across each channel

In the modern era, borrowers expect a digital mortgage process that is transparent and user-friendly, with streamlined, secure data uploads and quick turn times. In addition, borrowers are demanding real-time notifications on their progress through the borrowing process. In a recent survey, 63% of consumers indicated their preference for using an online mortgage process over an in-person process, with 58% indicating that the availability of an online application impacts their lender selection.¹


FinTechs and nonbanks have been able to capitalize on customer expectations for digitized lending experiences with seamless digital journeys and faster processing times supported by state-of-the-art technologies. Conversely, although some traditional banks have digital processes, many have yet to make the transition from offering paper-intensive, brick-and-mortar-based and relationship-driven transactional customer experiences to digitized lending experiences. As a result, FinTechs and nonbanks are grabbing market share from traditional consumer banks.


Composition of top 10 mortgage originators by volume in 2022²

The gaining popularity of FinTechs and nonbanks is driving banks to modernize their consumer mortgage lending platforms from fragmented and labor-intensive processes to digitally enabled, data-driven, holistic mortgage borrowing experiences. In addition to meeting growing customer expectations and bolstering competitiveness, lending platform modernization can help banks hindered by legacy technology reduce their technology spend. For example, large banks’ average technology spend for closed mortgages is four times that of nonbanks.³

Given that the industry is grappling with higher interest rates and lower origination volumes, the opportunity is ripe to make strategic investments in platform modernization to be ready for the next market rally.

Several of the top lenders have set aside investments or recently initiated projects to modernize mortgage lending platforms.⁴

Banks need to modernize now. Not doing so only perpetuates the highly ineffective boom-and-bust cycles of the past embodied by sustaining and surviving during an economic downturn, rapidly increasing headcount as the market rebounds, and then managing through a prolonged period of operational constraints, poor customer experiences and lost revenue opportunities.

The concept of a lending platform has fundamentally evolved, including the definition, core capabilities, and interaction with other systems across the lending value chain. Investing in platform modernization doesn’t just optimize positioning for the next market upturn — it establishes an infrastructure and framework that can flex with the market, creating long-term sustainability and dependable operational efficiency.

Investing in platform modernization doesn’t just optimize positioning for the next upturn — it establishes an infrastructure and framework that can flex with the market, creating long-term sustainability and dependable operational efficiency.

Key components of a modern lending platform include:

  • A fully digital and unified application process
  • Advanced document management and data extraction
  • Digital integration with third-party vendor services during application and fulfilment
  • Robust loan processing and underwriting capabilities
  • Full suite of e-closing options available to customers

Platform modernization benefits

From application to e-closing, the following are examples of current gaps that exist with a traditional lending process in contrast to the improved target state that results from lending-platform modernization:

Loan application: Easy-to-execute processes, clear next steps and effective customer engagement can help drive an efficient transition to loan fulfillment and set the stage for a positive customer journey.

Loan processing: Use technology and trusted data sources to reduce the need for borrower-provided information, quickly satisfy conditions, resolve issues, and create an electronic loan file that is easy to underwrite.

Loan underwriting: Perfect the use of data, automation and tools to speed decisioning, resolve escalations, improve quality and reduce risk.

E-closing: Meet the customer where they are by offering all allowable options for closing and settlement; meeting and exceeding expectations in this area is necessary for positive surveys and net promoter scores.


With origination costs soaring and customer expectations for personalized service and digital experiences increasing, the time to modernize is now. Lenders that fail to do so and continue to maintain antiquated or suboptimized mortgage lending platforms will continue to face substantial pressure in the areas of competitive growth, customer experience and operational excellence. On the other hand, lenders that make strategic investments towards modernizing their mortgage lending platforms will gain efficiencies (shorter cycle times, better first-time-right processing, etc.), leading to better customer experiences that can drive business growth.

Dan Rocklein, John Dyer and Karan Kapoor also contributed to the article.


In an accelerating digital word, evolving customer expectations, changing demographics and increased competition from FinTechs and nonbanks are driving consumer banks to transform their mortgage lending platforms. Lending platform modernization not only helps lenders fulfill customer requirements and spur competitiveness, but creates a flexible infrastructure and approach that can drive durable sustainability, efficiency and growth.

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