"Technology is key"
To Magesh Sarma, making the mortgage lending process more efficient through digitization, automation and other technologies was important enough during the boom times. Those innovations are even more crucial now as the industry downturn continues, he said.
“It’s created an increased sense of urgency,” said Sarma (pictured), chief information officer and chief strategy officer at AmeriSave Mortgage Corp.
Sarma has worked in his role at the Georgia based lender for 12 years. He may be a technologist, but he describes his role with the company as more than just tech development.
“My job is to help make home affordability better,” Sarma said. “In all the years I’ve been here, I’ve been working to apply technology to help consumers afford their homes.”
Read more: Product showcase: AmeriSave's AUSSIE broker platform
That means he focuses on applying technology to help increase revenue, lower costs, minimize risks, and improve user experience and overall digital performance. His goal, he said, is to make the digital experience positive and even uplifting for both consumers and employees alike.
That objective has been true enough during the mortgage upturn and it continues with the downturn.
Like many mortgage lenders, AmeriSave has had to reduce staff and cut costs as the market slowed to a crawl. Recently, AmeriSave announced it has shut the doors of its wholesale channel, AmeriSave Wholesale Mortgage Solutions, without disclosing details. The division operated for a little over a year.
Sarma did not discuss job cuts but commented briefly on the strategy change. AmeriSave decided to exit wholesale lending to focus its resources on the core business of consumer direct and retail lending, he said. That shift, he added, allows him to continue work modernizing the core business.
“We are now able to focus the resources we have and what we are looking at as our main focus areas in this market,” Sarma said.
The cutbacks should have little effect on technology innovation and further development, he said. AmeriSave employed nearly 2,600 people as of April. Now, the number is just over 2,000 employees, the company disclosed.
“The mandate is still to continue to innovate toward the company’s mission of making homeownership affordable to our customers,” Sarma said. “As we focus on more critical efforts, some of the ones that are going to take a few months to get out the door may or may not be stretched a little longer.”
Downturn tech investments
Sarma believes that technology investment is even more important during a downturn than when demand is soaring.
“When demand is very high, we have our hands full … [as] we are going through the pains of tremendous growth over a very short amount of time,” Sarma said. “All our energy is spent just making sure that the consumers we’ve got in the book are properly serviced and they are happy.”
When demand is low, however, lenders have much more time to think through how they want to digitize and innovate.
“During these times when [high] demand is not there, it gives us the opportunity to actually take on some innovation ideas and [place them] in a lot more focus than we would when market conditions are very different,” Sarma said.
One key AmeriSave goal during this down period is to use technology to find people it can help even though they’re not actively advertising that they’re seeking a mortgage. Some of that may involve finding potential customers who want to access their home equity, Sarma said.
“There’s a lot of equity built up in people’s homes that they don’t realize they can tap into. They’re probably underleveraged in those situations,” Sarma said. “How can we use technology [including data science] … to bring all that to the table to actually identify market segments, and identify consumers that we should be reaching out to and proactively engage with them?”
The current market also offers an excellent opportunity to find more diverse segments of potential customers, he said, as well as to ensure customer pipelines continue even as rates rise.
“We are using technology to better hedge our pipelines,” Sarma said. “We are applying innovative techniques to make sure that hedging is OK.”
Vital skills in a downturn
Sarma said he can help maximize the use of technology, in part, by being able to accurately assess the current business environment.
Read next: AmeriSave Mortgage embraces the insurance business
“I have a deep experience … being able to think through how technology can be brought to the table to perhaps improve the business situation,” Sarma said. “A lot of people may look at technology by itself and they won’t necessarily understand how to apply it to this situation. The people on the business side may know a lot about that situation and – I have personally experienced this – they don’t know what questions to ask, and the technology guys don’t know what answers to give.”
Sarma helps bridge the gap between those two sensibilities, he said.
“I can walk into a meeting and it is just intuitive to me … how to apply technology to solve a problem,” Sarma said.
That sensibility has also applied toward developing products and services during the downturn, he added.
“We don’t want to show up late to the party when the market has gone away,” he said.
Sarma predicted that the downturn could last at least another nine to 12 months “at a minimum.” With current conditions likely continuing for a while, he expects the industry to embrace much more automation and other innovations to lower the cost of loan production. Lenders will also increasingly give consumers the ability to interact with them electronically, he predicted, among other innovations.
“To do that,” Sarma said, “technology is key.”
