The term “digital transformation” has been a buzzword in the banking sector for quite some time. While the industry has largely embraced technology, particularly in areas such as lending and fintech, there is one sector that often gets overlooked: the appraisal department.
This is surprising given the significant role appraisals play in real estate and lending decisions. So, why is it critical for banks to prioritize digital transformation in appraisal departments, and what’s the downside if they don’t?
If the appraisal department remains analog, it becomes a bottleneck in an otherwise streamlined digital chain.
Maintain Lender Relationships
As more banks begin to realize the benefits of integrating digital tools into their appraisal processes, those that don’t will find themselves at a competitive disadvantage. Modern customers often seek the fastest and most streamlined services.
If one bank can offer faster loan processing due to a quicker appraisal process, it’s likely to attract more customers. It also helps the relationship managers keep their established relationships. The cost of losing solid borrowers is very expensive to your financial institution.
One of the most immediate consequences of not adopting digital solutions in the appraisal department is the inefficiency in processes. Manual appraisals or legacy platforms lacking custom configurations can be time-consuming and delay loan processing.
5 Costs of Delaying Transformation
1. Inefficiency and Time Delays
2. Inaccuracy and Subjectivity
3. Increased Operational Costs
4. Lack of Competitive Edge
5. Missed Opportunities
Why the Overemphasis on Lending and Fintech
It’s understandable why banks prioritize lending and fintech. These areas are often the face of the institution to the consumer, and advances here can lead to immediate visible benefits, both in terms of operational efficiency and customer experience. However, every department including appraisals, plays a vital role in the overall efficiency of the bank.
While the winds of digital transformation have swept through much of the banking world, they need to reach the valuation team. Overlooking the appraisal department not only slows down the momentum but can also lead to tangible inefficiencies and missed opportunities.
As banks plan their digital roadmaps, it’s imperative to ensure that all departments, especially those often overlooked, are part of the journey.
The appraisal department is important.
You are important.
What are you waiting for?