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Automation: The Next Step in Cenlar’s Digital Transformation

Client Partners Automation: The Next Step in Cenlar’s Digital Transformation

Automation: The Next Step in Cenlar’s Digital Transformation

When you work with automation, you have to work intelligently. You can't just automate everything because not everything is suitable for automation. If you automate a bad process, you've only made it faster — not better. 

That’s the philosophy behind our Automation Factory. It’s focused on “better” — strategic automation as part of a larger effort to transform the organization. It’s not automation for automation’s sake. 

To ensure we’re making the right decisions upfront, we’ve built that thoughtfulness into our automation governance model. We want to reduce our risk and manual controls while providing a better servicing experience for our clients and their homeowners.

In 2023, we’re working on 30 automation projects, including streamlining mortgage insurance (MI) cancellation requests, automatically scrubbing federal data to ensure active duty military instantaneously receive the protections afforded to them by the Servicemembers Civil Relief Act (SCRA) and establishing a Private Investor portal that provides self-serve data in a more secure environment.

“We’re very excited about Automation Factory,” Chief Digital Officer Josh Reicher said. “Introducing automation, when it’s so core to our business model, makes this process fun. I’m so energetic about it that when I go home to my wife, I’m still talking about it.”

To launch Automation Factory in earnest, “collaboration” has been a key word. Reicher’s Digital Services team and an operations team led by Director of Operations Production Jeremy Oliver has worked with partners across the organization — from Loan Operations, Operational Change Management, Servicing Reporting, Controls, Compliance and Risk. Our Business Information Officers set the scope of the project, translating the business process into what type of  automation we do. These are just a few areas across Cenlar lending a hand to our automation effort. Our goal is to make our automations well-rounded and crowdsourced.

“This is not just an IT thing,” Reicher said. “This is a Cenlar thing.”

Josh Reicher, Chief Digital Officer 

Proving pods could work

This is a continuation of work we started in 2021. When we launched Automation Factory two years ago as a pilot program, we knew we’d only be able to put a handful of automations in place. But we wanted to prove the concept, to see how scalable our team could be in working across the organization to introduce new automations.

The pilot proved successful — we introduced seven automations in the last six months of 2021, including streamlining processes involving incoming wires, MI data corrections and payoff statements. But, just as importantly, it also served as confirmation that we could scale up. It gave birth to the concept of stackable development teams — or “pods” — that work in parallel to get more automations done.

The effort started in 2021 with just one pod. In 2023, we’ve multiplied that to nine, with three pods fully staffed with our own internal analysts and developers who specialize in automation. In the past, we may have taken one automation from the beginning all the way to the end before starting the next one. With the pod model, we can run as many as 13 automation projects in parallel.

This new model allows us to be more flexible, while also ensuring projects get done consistently and quickly. The work that we’re doing and the technology that we’re using allows us to transform the organization at a much faster pace.

What we’re working on now

We entered 2023 knowing that it would be a key year for our automation effort. We spent the entire month of January going piece by piece to ensure we were approaching Automation Factory smartly and weren’t overextending any of our resources. 

We’ve already launched our MI Cancellation automation this year, which eliminates a common pain point for homeowners: waiting to hear back on a determination to learn whether their request to remove MI has been accepted. Now, homeowners are able to go to the CenNet homeowner website, and request to have MI removed, triggering our automation. Our system will decision that request, and send the borrower the appropriate letter within a week.

It’s part of our philosophy that any automation should make life simpler for our clients and their homeowners.

Take our SCRA Scrub automation, which identifies and verifies the military status of homeowners so that they are provided the appropriate protections under SCRA. When a service member is deployed, we know that the last thing on their mind is contacting their mortgage servicer. To ensure timely and accurate SCRA protections are implemented, our SCRA automation will scrub our entire portfolio against the Department of Defense’s database, update information as appropriate and generate a report daily that indicates which loans and fields were updated each day. Our Special Products team can act on this information to ensure eligible homeowners are receive SCRA protections.

Another project coming this later year is our Investor Reporting portal. Instead of sending reporting to every investor on a monthly basis via email, we’re creating a web portal that will provide investors a secure login to their very own page. Throughout the month, investors can log in and physically view all of their reports, including historical data. This fully secure system ensures the right people get the right files, through an enhanced secure process versus email.

Where we want to head

Moving forward, we want to expand our Automation Factory, building upon the 30 planned automations this year. Our pod model also means we have the ability to not only scale quickly, but also offer quick enhancements to existing automations as we get feedback from clients.

As the automation team talks to business groups and works through installing the current automation projects, we’re also looking at what we can install in the future. Business leaders have bought into this mindset, and also are coming to the team with ideas. We are evaluating all the potential automation ideas. Soon, we’ll start a crowdsourcing initiative so all employees are thinking about how automation can enhance their roles, and have a way to share their ideas.

It’s the first step to the future of our organization. We’re striving for exception-based processing, where our people are focused on analytical activities, not repetitive tasks.

Servicing is ripe for innovation. Four years ago, we committed to a digital transformation at Cenlar, and dedicated ourselves to investment in technology. We’ve realized much of that digital transformation with a modernized homeowner experience and improved client-facing capabilities.  And now, with Automation Factory as the newest stage of our digital transformation, we expect even higher effectiveness and performance in servicing our clients and their homeowners.

“Investing in this kind of automation demonstrates where Cenlar wants to head,” Oliver said. “Doing this now will assist us as we fulfill our pledge of service to our clients and their homeowners while also being an innovation leader in the mortgage servicing space.”