Banking CIO Outlook : News

The Covid-19 pandemic raised questions about how different industries would adapt to the new reality of "work-from-home." Companies that had been slow to adopt new technologies were particularly affected, such as banks and mortgage firms. Our experience with the technological revolution in banking over the past half-decade has prepared us for companies successfully transition employees to remote work and increase automation. My company's lenders achieved their most productive year ever because of their willingness to embrace new technology. Benefits and threats of new technology According to the Annual Mortgage Bankers Performance Report, a rise in personnel expenses offset a sharp increase in profits per loan, from $1,470 in 2019 to $4,202 in 2020. Market conditions played a significant role in 2020's success, but technology also played a role. Cost reduction and efficiency improvements helped companies boost employee loans. Increasing automation has also enabled companies to let their employees focus on critical decisions. Executive teams are now keen on exploring technology-based solutions, such as AI, machine learning, and blockchain. It is a healthy desire to drive innovation. We must consider how we can benefit from and threaten our gains from next-generation technology. Changing administrations in Washington, D.C has prompted more active regulators to protect consumers who might be particularly vulnerable. The federal government wants to address the danger sooner rather than later. Cybercrime and biased algorithms are two major technological threats our consumers face. Here's a quick overview of the threats and how mortgage banks can respond. Increasing cybercrime and fraud risks: Cyberattacks continue to challenge the banking industry and consumers alike, despite an executive order to help shore up the nation's cyber infrastructure. Recent years have seen an increase in complaints lodged by the FBI's Internet Crime Complaint Center (IC3). The first million complaints were registered over seven years ago, while over a million were registered in the last 14 months alone; the full list is now six million. Monitors, storekeepers, and sensitive financial consumer data handlers should be concerned. The most concerning thing is instances of cybercrime that remain unreported due to companies' reluctance to disclose attacks. Automation and digitization have made us increasingly vulnerable to these attacks. There is also a wave of mortgage and title/wire fraud in the mortgage industry. The share of purchase business increased in 2021, driving an increase in application risk fraud following a decrease in 2020. Fraudsters target new e-closing software and automated processes, jeopardizing consumers' down payments as they target the back end of the loan process. In the financial services industry, this does not mean reverting to paper but rather improving processes, monitoring vendors closely, and continually testing their systems for weaknesses. Consumer-first processes and experiences are driving a new era of technology. The Impact of Automation/AI on Diversity, Equity, and Inclusion: In recent years, technology and consumer experience have improved dramatically, but the industry's commitment to diversity, equity, and inclusion has been even greater. Almost all major banks now handle this issue. A majority of companies use automated underwriting tools to evaluate creditworthiness. Theoretically, this treats all consumers equally. Some advocates argue that the data we use for judging a borrower's creditworthiness is biased. In order to allow more families to realize their American dream of homeownership, lenders need to reevaluate the factors that are used to judge credit and expand the credit box prudently. ...Read more

Banks offer comprehensive financial solutions for small businesses, integrating technology, mobile/online banking, and business insurance, focusing on growth and sustainability. Small businesses are the backbone of many economies, acting as job creators and fueling community development. However, managing finances can be daunting for small business owners. Banks offer various services and products tailored specifically to help small businesses flourish. Banks offer a comprehensive suite of financial solutions tailored to the needs of small businesses. Deposit services include business checking accounts, which provide lower fees, higher transaction allowances, and seamless integration with accounting software. Additionally, business savings accounts help companies set aside funds for future projects, emergencies, or investments while offering competitive interest rates and maintaining liquidity. Lending and credit solutions play a crucial role in business growth and financial stability. Small business loans provide essential capital for purchasing equipment, expanding operations, or covering daily expenses, with customizable terms based on business size and needs. Lines of credit offer flexible borrowing options to manage cash flow or seasonal fluctuations, while equipment financing enables businesses to acquire or lease machinery through structured repayment plans. Many banks also collaborate with the Small Business Administration (SBA) to provide government-backed loans featuring lower interest rates and favorable terms. To facilitate seamless transactions, payment and merchant services include merchant accounts, allowing businesses to accept credit and debit card payments through integrated point-of-sale (POS) systems. E-commerce payment solutions support online shopping with digital payment systems and contactless payment options. Additionally, payroll services streamline salary disbursement and tax deductions through automated banking tools. Advancements in financial technology tools enhance banking efficiency for small businesses. Mobile and online banking platforms enable business owners to manage funds, track transactions, and make transfers on the go. Many banks also integrate with accounting software such as QuickBooks and Xero, simplifying bookkeeping processes. Beyond transactional services, banks provide advisory services to support business growth, risk management, and financial planning. Business owners can access expert guidance on tax compliance, investment decisions, and strategic financial management through dedicated advisors, workshops, and webinars. To mitigate risks, business insurance solutions are available through banking partnerships with insurance providers. These packages cover liabilities, property damage, and employee-related risks, ensuring businesses remain protected. Recognizing the unique challenges faced by new ventures, banks also offer start-up support programs. These initiatives may include incubation hubs, mentorship programs with seasoned entrepreneurs, and guidance on securing initial funding or grants. As sustainability becomes a priority, many banks now provide sustainable banking initiatives, including green loans and financing options for businesses committed to renewable energy, waste reduction, and environmentally responsible projects. By incorporating sustainability into financial solutions, banks empower businesses to operate responsibly while fostering long-term growth. Banking services are indispensable for small business owners. They not only provide funds but also empower enterprises with the tools, technology, and guidance needed to grow sustainably. By understanding and leveraging these services, small business owners can build a solid financial foundation and unlock their venture's true potential. As the business landscape evolves, staying informed about new banking offerings can provide a competitive edge. ...Read more

Agrowing number of businesses are using software as a Service (SaaS) to operate their operations as the business world becomes increasingly digital. SaaS is a cloud-based distribution model that offers various advantages over traditional on-premises software, including lower costs, faster deployment times, and greater flexibility. While each SaaS solution is unique, most share several features and benefits. Significant SaaS benefits and features are outlined below: Security and reliability: One advantage of software as a service is that it is typically more secure and reliable than on-premise systems. SaaS service providers make significant investments in security and employ teams of professionals committed to keeping the systems secure. They also have extensive disaster recovery procedures, so business owners can be confident that their data will be available even if there is an outage or other issue. Onpremise software, on the other hand, is often less safe and reliable because every organization must invest in security to keep their systems functioning properly. As a result, this can be a severe disadvantage for businesses that rely largely on software and want assurance that it will be available when needed. Scalability: Scalability is another important property of SaaS that encourages its usage. Because the solution is cloud-based, it can be readily customized to meet the company’s changing demands. For example, if business owners are expanding their business and need to extend their customer base, they can add more users to their SaaS system. This flexibility level is impossible with traditional onpremise software, which frequently requires a large upfront expenditure and a long-term commitment. As the company grows, SaaS will expand to suit the company’s needs. Improved efficiency: Business owners constantly look for ways to improve efficiency and lower expenses. One way to accomplish this is to invest in software that automates tasks and procedures. The top SaaS companies have features that can help them streamline operations and boost business profits. For example, many SaaS platforms include automation features to assist with tasks such as data entry, billing, and customer interactions. Furthermore, many SaaS platforms include reporting and analytics tools to help businesses analyze their progress and discover areas for improvement. These essential SaaS features can help them improve their efficiency, save money, and expand their organization. Simpler integration: A SaaS product typically has APIs or other integration points that enable it to be readily integrated with other software products and systems. As a result, development teams can save a significant amount of time and effort that would otherwise be required to construct custom integrations. Furthermore, many software-as-a-service applications are built to operate seamlessly with other popular software products and systems, reducing the amount of effort necessary for integration. This makes them perfect for organizations that employ various software products. ...Read more