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Executive Conversations is a HousingWire web series that profiles powerful people in the financial industry, highlighting the operations and the people that make this sector tick. In the latest installment, we sit down with Michael Detwiler, the senior managing director at Accenture, to talk about a paradigm shift within the mortgage industry to As-a-service offerings.
Q. How does Accenture define Mortgage-as-a-Service?
A. There is a lot of talk in the industry about Mortgage-as-a-Service (MaaS), but if we don’t all agree on what it means, how can we really speak to it? With that in mind, starting last November, Accenture convened a group of mortgage experts who spent a lot of time discussing how we’re going to define MaaS — for Accenture and maybe even the industry at large. We ended up conducting a survey to interview more than 100 lenders, and have defined our offering on that insight: Accenture’s Mortgage and Compliance as-a-Service (MCaaS) offering is a prescribed, end-to-end, product-rich mortgage manufacturing solution executed on our proprietary technology platform for a transaction fee that is coupled with a warranty for compliance and investor risk.
Q. How is MCaaS changing the conversation on mortgage process outsourcing?
A. With traditional outsourcing, the client is responsible for bringing to the table the process and the technology. To go from that paradigm to our As-a-service paradigm where Accenture is providing the people, process, technology and compliance components was quite compelling to the executives we interviewed. In our discussions with customers, once they got their head around what this means — that the vendor brings to the table all four aspects of the As-a-service process — there was a huge response that this is what the industry needs. There is a large contingency that is very excited and optimistic about the opportunity to have a company like Accenture offer a full end-to-end solution that is business outcome -based.
Q. How does this model benefit lenders?
A. If you look at the market today, outsourcing generally is a people based solution, where lenders go to vendors and say, “I need x number of people for this type of service, give me a per head cost.” But As-a-Service has to be outcome based since the businesses we serve are outcome based and we’re aligning with the way our customers are remunerated. Lenders, especially, feel unable to keep up with all of the compliance and technology aspects of the mortgage loan process. And this becomes magnified as the market moves to more of a purchase market. Do lenders really have the wherewithal to be competitive on much more complex purchase products? The CFPB is exercising oversight on all that lenders are doing, and with more complex products, it all becomes a nut that some lenders have a hard time cracking. By taking care of the back end of the process, we are giving our customers the ability to focus on client relationships and interact with them to provide excellent customer service.
Q. How does MCaaS provide lenders with the innovation they need to survive and compete amid escalating compliance costs?
A. In this regulatory environment, it’s become very burdensome for banks to offer mortgages. Lenders have to constantly update their tech infrastructure and add layers to their internal processes. Our definition of MCaaS includes the manufacturing process and tech aspects of that process. With that model, it is incumbent upon us to constantly be innovating to provide the best solution for customers. Because we are supplying a solution at scale, we can be better at it than one individual company focused on their own operation; it’s a one-to-many model instead of a one-to-one model. From a tech perspective, Accenture has been providing very innovative solutions to our customers in the mortgage space for years, and the experience and technology we’ve been exposed to has allowed us to create a very unique capability around our proprietary platform for back-office automation. When you consider our ability to add compliance to that, plus people, it becomes very difficult to compete with.
Q. Why is MCaaS a better alternative than traditional vendor contracting models?
A. At the end of the day, in the traditional model lenders are still responsible for the people, process and technology, which is a big burden. As Accenture gets size and scale in MCaaS, our innovation comes back to the customers, who will have the ability to achieve a predictable outcome for As-a-Service. It becomes very easy for them to understand what their cost to scale is. I don’t believe you can have an As-a-service model, truly, unless it’s outcome based. If it’s anything else it’s just the old model where a client is paying for people, to have variable staffing. The whole idea of the variable staffing model is that it has the capacity to solve for peaks and valleys, but we have to be far more innovative than that in the As-a-service world. Our customers can expect real results for the dollars they give us.
