Lending

A major Asia Pacific Bank, processing more than 650,000 mortgage loans worth more than $A55B annually, was going through a contraction business cycle. Despite the increasing volume of new mortgage applications, the company was losing market share due to their long loan approval and processing times. Their outdated back-end systems created incremental unit costs, making the bank less competitive.

Exigen's IT 2.0 Operational Innovation business solution was deployed as the response to the customer's two key business initiatives - decreasing unit processing cost and creating new competitive advantage.

Results

• Reduced loan processing cost by more than 50%, doubling loan processing capacity with 50% of the original staff
• Drastically reduced cost of regulatory compliance by eliminating penalties associated with lost or misplaced documents
• Significantly lowered transaction unit costs by converting elements of fixed cost structure to variable costs

Following, are some of the IT 2.0 ingredients used to deliver these results:

Contract – a Virtual Joint Venture contract was optimal for sharing operational risks, enabling the partners to measure and track the P&L level economic impact on business performance

• Economic metrics, including Revenue/FTE, Transaction Unit Cost, P&L, and Profitability
• Partners rewarded through profit sharing

Methodologies

• Exigen's Value Assessment determined the right economic metrics and indicators to govern this engagement.
• Results included the proposal for mortgage business process re-engineering, organizational structure and technology requirements that improved overall productivity.
• Target productivity improvements and cost savings were used as a basis for the Joint Venture contractual terms and conditions.

Technology – Exigen delivered fit-for-purpose components of the Exigen Process Backbone technology as well as Lending industry best-practice templates.

Delivery – Exigen delivered the loan servicing function to the client as the Business Process Utility (BPU) hosted offering.