How Blockchain Would Improve the Mortgage Process
Authored by: Blockchain Team, Synechron
Global banks that have a large mortgage business are facing pressure internally and externally to upgrade their operating model to save money, decrease processing times and enhance the customer experience - today it can take more than 60 days to complete a mortgage transaction. The pressure is particularly strong with FinTechs like Rocket Mortgage and Trussle creating a completely digital experience for prospective home buyers. Banks, therefore, are exploring everything from mature technologies like Optical Character Recognition (OCR) to more leading edge and high-tech solutions based on Blockchain and artificial intelligence. While some of these solutions could dramatically impact day-to-day business for lenders and their brokers and customers, Blockchain has the potential to completely transform the entire mortgage financing industry. Here’s why.
The trust relationship
The financial services industry is all about trust - whether relationship based, reputational, authoritative (legal) or transactional - banking today are built on trust. In most areas, including mortgage lending, banking has become more transactional and it remains of utmost importance that all parties can achieve trust and consensus around transactions to mitigate:
- the money/assets/value will be not delivered,
- will not be of the required quality,
- that other obligations will not be honored,
- or that consensus will not be reached on the outcomes
Given that Blockchain can deliver these key features through applications that focus on a specific problem – the mortgage industry is a prime candidate for innovation.