The Big Data Revolution: Ellie Mae Study Shows How Data and Analytics Make the Mortgage Industry More Efficient

Rhea-AI Summary

Ellie Mae, part of Intercontinental Exchange (NYSE: ICE), highlights the importance of data and analytics for mortgage lenders amid low interest rates. A new eBook examines how lenders can enhance efficiency, control costs, and grow their businesses through data-driven decisions. Research indicates a significant gap in data strategy, with 39% of lenders unaware of their analytics spending. While larger lenders are more likely to have defined strategies, only 3% reach prescriptive analytics. The potential for increased profitability and improved customer satisfaction is emphasized as lenders adapt to a competitive market.

Positive

• Ellie Mae's eBook offers insights into enhancing operational efficiency and decision-making for mortgage lenders.
• The emphasis on data strategies can lead to cost control and new growth opportunities for lenders.
• Larger lenders demonstrate a higher likelihood of having defined data strategies, indicating potential leadership in the industry.

Negative

• 39% of lenders lack awareness of their spending on data and analytics, signaling inconsistent usage of data in strategic decisions.
• Only 3% of lenders are advanced enough to utilize prescriptive analytics for future decision-making.
• Smaller lenders appear to lag in developing comprehensive data strategies, which may hinder their competitiveness.

PLEASANTON, Calif., Oct. 20, 2020 /PRNewswire/ -- With interest rates near record lows, mortgage lenders are being inundated in the current high-volume market, increasing the need to use data and analytics tools to become more operationally efficient. A new eBook from Ellie Mae, now part of Ice Mortgage Technology and Intercontinental Exchange, Inc. (NYSE: ICE), analyzes how lenders are using data and analytics to increase efficiency, make better lending decisions, control costs, identify and mitigate risks, establish repeatable and measurable processes, and uncover new business growth opportunities.

"The proper use of data should create a virtuous profit cycle," said Joe Tyrrell, president of ICE Mortgage Technology. "As lenders shift to a data mindset and use it to identify and correct competitive disadvantages, market opportunities, cost reductions and blind spots in their workflows, they can increase their throughput and profitability to invest in their continued growth. However, many lenders don't have a defined data and analytics strategy, which means they're missing out on opportunities to contain costs and accelerate growth for their organizations."

Ellie Mae's Data & Analytics survey found that two out of five (39%) lenders could not say how much their companies spent on data and analytics in 2019. That shows how inconsistent the industry's current use of data is to inform strategic business decisions. Lenders large to small are starting their data journeys from different points, have access to different resources, barriers to adoption, and abilities to implement a data and analytics strategy.

Ellie Mae found that it is far more common for large lenders to have a clearly defined data and analytics strategy (60%), compared to small and mid-size (55%) lenders, who are more likely to be in the early evaluation stage of their data journey.

"As the mortgage industry becomes more competitive, lenders will need to find new ways to leverage and analyze available data to be operationally efficient, differentiate, and grow their business," Tyrrell said. "It's not enough to use data to understand 'what' happened in the past. Lenders need to understand what is happening right now and what is likely to happen in the future, while they still have the ability to take corrective action and/or make critical decisions." 

"Companies that implement and continuously improve their data analysis practices can reap the benefits of greater operational efficiencies, risk mitigation, transparency improvements, and streamlined processes. But the real value of data insights is to create a competitive advantage in positioning themselves in advance of emerging market trends, identifying ways to improve profitability before anyone else and most importantly knowing how to meet the expectations of their borrowers and drive differentiated customer satisfaction," he added.

According to Ellie Mae's Data & Analytics survey, lenders are all over the map when it comes to their data and analytics journeys.

• Descriptive Phase: 37% of lenders have just begun their journey. They can see simple facts about past business performance.
• Analytical Phase: 36% of lenders have reached the stage where they not only understand what happened, but why it happened, too.
• Predictive Phase: 24% percent of lenders have taken it a step further and are using data to see patterns and meaningful trends that affect their business.
• Prescriptive Phase: Only 3% of lenders are far enough along their data journey to conduct the type of prescriptive-level analyses that can inform how they should make future decisions, for example, recommending loan programs for specific applicants based on a set of predetermined factors.

Forward-thinking lenders know that data can unlock the secrets to understanding and anticipating the needs of their business, their customers, and the broader industry. To download the Ellie Mae Data & Analytics eBook, and for more information, visit:

https://www.elliemae.com/resources/collateral/ebooks/the-big-data-revolution

About Ellie Mae Insights

Ellie Mae Insights™ provides an easy-to-use application to access industry and peer group data, as well as industry benchmarking, so you can be better informed in near real-time to make smart data-driven business decisions. It works together with Ellie Mae's Encompass Data Connect, enabling you to analyze loan origination data with your existing visualization tools to uncover actionable insights that can dramatically increase your business's efficiency, agility and profitability. By blending your loan data with your front and back office data, you can gain a 360-degree view of your business to spot trends and production inefficiencies.

Learn more about how Ellie Mae is changing the future of the mortgage industry by leveraging business intelligence, artificial intelligence, machine learning, and real-time data analytics to build the next generation of mortgage management solution. Visit elliemae.com/solutions/data-analytics.

About Ellie Mae

Ellie Mae, now part of Intercontinental Exchange, Inc. (NYSE: ICE), is the leading cloud-based platform provider for the mortgage industry. Ellie Mae's technology solutions enable lenders to originate more loans, lower origination costs, and reduce the time to close, all while ensuring the highest levels of compliance, quality and efficiency. Visit EllieMae.com or call 877.355.4362 to learn more.

© 2020 Ellie Mae, Inc. Ellie Mae^®, Encompass^®, AllRegs^®, Mavent^®, Velocify^®, the Ellie Mae logo and other trademarks or service marks of Ellie Mae, Inc. appearing herein are the property of Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other company and product names may be trademarks or copyrights of their respective owners.

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SOURCE Ellie Mae

FAQ

How can mortgage lenders improve efficiency according to Ellie Mae?

Ellie Mae suggests that mortgage lenders can improve efficiency through the proper use of data and analytics, as outlined in their new eBook.

What percentage of lenders have a defined data strategy?

According to Ellie Mae, 60% of large lenders have a defined data strategy compared to only 55% of small and mid-size lenders.

What findings did Ellie Mae's Data & Analytics survey reveal?

The survey revealed that 39% of lenders could not determine their spending on data and analytics, indicating a lack of consistent strategic decision-making.

What are the phases lenders go through in their data journey?

The data journey phases include Descriptive (37%), Analytical (36%), Predictive (24%), and Prescriptive (3%).

What is the significance of data for mortgage lenders?

Data is crucial for operational efficiency, identifying market trends, mitigating risks, and enhancing customer satisfaction.