The new compliance paradigm: How business intelligence and big data are

changing the mortgage landscape

In partnership with

Chris EdgingtonSr. Industry Solutions Marketing Manager, Kofax, Inc.

David K. MoffatPresident & CEO, Mortgage TrueView

Dimitri Seneca SnowdenSenior Systems Engineer and Visual Strategist, Altosoft

Moderator:Richard BitnerPresident, HousingWire

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Today’s Regulatory Environment

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Compliance Costs Around the U.S.

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Focus and Priority on Regulatory Compliance

5Source: CDW

Forced out of Business – Smaller Banks Unable to Comply

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Basel III capital rules could cause more banks to unload servicing rights

Institutions that rely on mortgage banking could be forced to seek partnerships with more diversified institutions

Some independent mortgage bankers are "too small to comply“

Get bigger, hire attorneys, get guidance on compliance issues

In the News:   Thursday, February 13, 2014

Small Banks’ Disappearing Act

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Number of Banks with $100 Million or Less in Assets

From Siloed to Shared and Collaborative

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Best Practices for Regulatory Compliance

Invest In Technology That Multitasks

Apply Analytics to Paint a Clearer Picture

Make Compliance a Business Priority

Extend Controls from Back Office to Front Line

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4 Pillars of Mortgage Automation

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Kofax Mortgage Automation Platform

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Presented by

David K. MoffatPresident

The Case for Intelligent Governance in the Mortgage

Industry

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Mortgage Industry Drivers

Demonstration

HMDAnalytics- Case Study - Research Project

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Strategic Drivers– Regulators are embracing Business Intelligence– Risk Management Matrix– Transparency

Tactical Drivers– Know more about your data than your regulator(s)– Know how regulators are using your data– Return on Investment Business Intelligence (ROI BI)

Business Intelligence Drivers

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1See http://www.fdic.gov/about/strategic/it_plan/BusinessTechnologyStrategicPlan2013-2017.pdf

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Strategic Drivers:Business Intelligence and Regulators

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1See www.consumerfinance.gov/strategic-plan . Image retrieved March 21, 2014

Strategic Drivers:Business Intelligence and Regulators

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Strategic Drivers:Risk Management Matrix

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Fail Pass

Fail Fail

Strategic Drivers:Transparency

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Tactical Drivers:Know Your Data

Completeness

Quality

Content

Context

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Tactical Drivers:How Regulators Use Your Data

Absolute Benchmarking– Adverse Outliers

Relative Benchmarking– Adverse Trends

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Executives respond to benchmarking:

Benefits:1. Current-state Assessment. A rigorous baseline of cost, quality and cycle time, external and

internal comparisons of cost and performance, and the identification of meaningful gaps enables fact-based, defensible understanding of the function's cost and effectiveness.

2. Basis for Change. An effective benchmarking initiative enables an organization to more easily identify and prioritize opportunities which, in turn, results in more informed and relevant improvement targets and a stronger overall business case for the transformation effort.

3. Basis for Continuous Improvement. Benchmarking supports a culture of managing by metrics and by enabling periodic measurement against the initial baseline.

4. Standardization. A standard set of terms and definitions for key aspects of a company's business processes enables the enterprise to share the same level of information about the

state of the enterprise's operations.

About Benchmarking

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Tactical Drivers:Return on Investment Business Intelligence

Drive Revenue

Control Operating Expenses

Control Regulatory Compliance Costs

Reduce Fines and Penalties

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Compliance AttributeTraditional

ComplianceParadigm

Intelligent ComplianceParadigm

Quantitative Metrics Did I do something I shouldn’t have? Am I doing something I should?

Qualitative Metrics Were the specified process performed? Was the specified order followed?  

Established/Static Rule Set SEC, FINRA, etc. Internal Revenue Code

Developing/Dynamic Rule Sets Dodd-Frank CFPB  

Entity/Enterprise Risk Management Absolute performance

Market Risk Management Relative performance  

Passive Event Driven (i.e., What/When)

Active Enterprise Driven (i.e., Who/Why)  

Integration Return on Investment Risk measurement Process Improvement

 

About Mortgage TrueView

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Questions?

A recording of this presentation will be available on HousingWire.com/webinars