The US mortgage industry is a $2 trillion industry that is in constant change and rife with complexities. Yet, it’s an industry that has been run on spreadsheets and aging technology. While management teams work around the clock to process and evaluate marketplace and operational data, they have been forced to make big decisions without a true understanding of the future financial impact decisions and changing markets may have on their enterprise. That is beginning to change. There is a growing number of innovators trying to tackle these problems and we had the chance to sit down with one of the leaders of that revolution, Michele McGovern, CEO of Alight (pictured below), a San Francisco-based enterprise technology firm dedicated to the mortgage industry.

A new class of technology

Alight is among a new class of technology innovators breathing new life into the mortgage industry. At the epicenter of technology innovation in the Bay Area, Alight founders saw the need for a collaborative planning and forecasting technology solution that provides visibility into the financial impact of decisions and sudden market changes in highly complex and dynamic industries. Given its narrow sales funnel and ever-changing market conditions, the mortgage industry was a natural first place to start.

While most mortgage banks rely on numerous operational systems and inputs for running daily business, when it comes to predicting future operational Aline CEOand financial needs in areas critcal to maintaining the value of the mortgage banking enterprise—headcount and contingent liabilities that may strain cash flow beyond 60, 90 or 120 days, servicing advances and repurchase obligations, for instance—even the most sophisticated mortgage banking enterprises still rely on spreadsheets and educated guesses to make decisions about their future.

“We’re changing all of that,” said McGovern. “Alight Mortgage Lending was designed from the ground up specifically for the mortgage banking industry. With Alight, mortgage bank management teams can see the financial implications of decisions—on P&L, balance sheet and cash flow—before they make them. No one else is doing that.” 

And the proof is in the pudding. In the first six months of 2016, Alight doubled its customer base over its previous best year, signing industry leaders like Guild Mortgage, a $14 billion originator with 250-plus branches, First Guaranty Mortgage and Union Home Mortgage onto the Alight platform. Stonegate Mortgage Corp. is among early adopters that have been using Alight for several years.

Innovation that changes the way mortgage banks are run

Alight Mortgage Solutions is unique to the industry because it stands on two pillars, McGovern contends, a team of mortgage industry and financial services veterans with over a century of direct experience in industry operations and financials, and an in-house technology team with roots firmly planted in the Bay Area innovation hub.

And Alight has invested in assembling a strong team from a cross-section of the industry, McGovern said, people with backgrounds in capital markets, mortgage insurance, warehouse lending, loan origination systems, financial services and vendor experience.

Alight enterprise-class software connects with systems already in place—G/L, LOS and data from capital markets providers—to deliver up-to-date information and a reference point to pull historical and real-time information. Mortgage bank management teams can access data about company performance, capital market vendors, interest rate shock data and portfolio valuations, and then create and compare multiple scenarios to see the financial impacts of marketplace changes and decisions ripple across the enterprise, through to P&L, balance sheet and cash flow.

Alight is partnering with key technology providers in the mortgage bank ecosystem—including both AMB and Loan Vision, that were among the first partnerships formed, for instance—to make the integration of firms’ operational systems and industry data into Alight as seamless as possible.

Recently, Alight upped the ante with its browser-based platform that improves accessibility to financial information by providing CEOs, CFOs and their teams permission-based access to critical systems and real-time information literally at their fingertips. 

Lenders can use the application on handheld devices like tablets, phones and even smart watches, making real-time scenario analysis as easy as a flick of the wrist. 

“We put enterprise and branch metrics directly into the hands of the people running each part of the business,” McGovern said, “Providing CEOs and management teams a 360-degree view of the enterprise.” Management teams can then optimize future performance by exploring alternative strategies for coping with marketplace volatility and then record decisions as a basis for future measurement and optimization, McGovern explains.