Author:
Nexval Infotech
As mortgage providers increasingly adopt digital tools, they inadvertently add new threat vectors that hackers can target. That is why mortgage AI and DIS or digital immune systems is such an important concept, as it provides cybersecurity by default and design from within mortgage systems. Digital immune system (DIS) is one of Gartner’s top 10 strategic technology trends for 2023 and an essential field for lenders to explore.
The State of Mortgage Cybersecurity in 2023
To understand the role of mortgage AI and DIS, we need to first look at the state of digitization and cybersecurity. According to a 2021 survey, 92% of lenders have doubled their pace of digital transformation, and 1 in 5 have at least quadrupled their pace. The use of digital tools ranges from robotic process automation (RPA) in mortgage to risk management platforms, automated document reviews, cloud data storage, business intelligence, and much more.
With every new digital tool you adopt, malicious actors have a new vector to target. That is why the incidence of cybersecurity attacks in mortgage (and the financial services sector as a whole) has increased exponentially. For example, 1 in 3 title transactions was found to be fraudulent in 2022 Q1 alone. Large servicing companies like Lakeview have suffered data breaches affecting millions of borrowers.
Companies are now taking proactive steps to mitigate such threats and prevent similar ones from occurring in the future. One way is to conduct a cybersecurity assessment, which is what Australia’s Commonwealth Bank did in 2022. The financial institution undertook three independent, external views in 2022, even as US-based Cenlar FSB (a top mortgage loan sub-servicer) hired its first VP of cybersecurity.
In addition to cybersecurity, system failures also pose a major risk when you adopt technologies like automation and RPA in mortgage. These can occur due to a variety of reasons, from external attacks to software bugs, flaws, and malfunctions. DIS is a system designed to improve resilience against all of these risks, whether malicious or accidental.
The end goal is to deliver a streamlined workflow for lenders and a superior user experience to borrowers to improve business outcomes. After all, 59% of Millennials and 70% of Gen Z would rather complete the entire mortgage process on a mobile app. To make these front-end and back-end systems resilient to all risks, a digital immune system is a must-have.
Read more: The Role of DevOps in Mortgage Services
What is a Digital Immune System in Mortgage?
The term digital immune system was coined by IBM in reference to comprehensive virus protection. In 2022, Gartner redefined the technology as an all-encompassing methodology for IT resilience that would protect against both system failures and external threats. Importantly, DIS is not one tool — just like RPA in mortgage, DIS is a set of solutions, strategies, technologies, and practices that transforms the software development and operations process to minimize risk.
Given that the mortgage industry has always been fraught with business risk at multiple levels, a digital immune system (DIS) is a perfect fit. It entails:
- Observability: Observability of IT infrastructure refers to your ability to see, understand, and measure the internal workings of a system. For example, if an outsourcing partner was to deploy an automated document review system using RPA in mortgage, you should be able to use a dashboard to monitor exactly how it operates and not just view the black-boxed outcomes.
- AI-augmented testing: This is why mortgage AI and DIS go hand in hand. Artificial intelligence helps make the software testing process more efficient, automated, and error-free. This, in turn, translates into fewer flaws and greater system resilience.
- Chaos engineering: This principle of mortgage AI and DIS refers to experimental tests conducted in safe environments to find weaknesses within a highly complex digital mortgage system. Through chaos engineering before you enter the production stage, you can minimize errors during normal operations.
- Auto remediation: Using auto-remediation, a digital immune system can correct issues automatically. This is achieved through a combination of mortgage AI and DIS, where artificial intelligence helps understand the contextual conditions behind an issue so it can solve it quickly.
- Site reliability engineering (SRE): SRE is a field popularized by Google, now adopted by cloud and infrastructure managers worldwide. It maintains observability of infrastructure and apologies service level objectives so that development teams are constantly supported with the equipment they need. For large financial institutions building their own applications, SRE is central to mortgage DIS.
- Software supply chain security: Finally, your end-to-end IT supply chain needs to be secure in order to protect the integrity of mortgage AI and DIS. This includes buying software from credible sources, partnering with reputed outsourcing firms, managing vendor risk, and thoroughly checking the quality of open-source code.
How a Digital Immune System Can Impact Mortgage Operations
The ultimate benefit of a digital operating system is to provide end users with a reliable, secure system for their transactions.
As the pace of digital transformation in mortgage increases, software engineering teams will struggle to keep up with changes and complexity. In this context, mortgage AI and DIS create adaptive and self-healing systems that are more resilient — benefitting everyone, from the borrower who receives a better UX to the lender who needs to spend less on upgrades and security patching, as well as mortgage engineering teams who enjoy a lighter workload.
At Nexval, we adopt the latest principles and methodologies of digital transformation to provide clients with reliable systems that function seamlessly. Our solutions for RPA in mortgage reduce your in-house effort and costs, while also being easy to maintain and immune to system failures.
Unlock the power of mortgage AI and DIS with Nexval! Speak with our Tech Gurus today.