After a few years of nothing less than an automation revolution in the title industry, market uncertainty and declining volume are now testing just how effective our efforts have been. If the primary purpose of employing technology is to streamline the workflow, reduce unnecessary expenses and drive greater productivity, the efforts of title agents and owners should be bearing some fruit now. Although overall revenue may be a shadow of what it was in 2021 or 2022, it may well be the investment in operational automation that’s even keeping the lights on for some as we await the next market upswing.
When it comes to eliminating inefficiencies, we as an industry still have some ways to go. Yet, there are fewer and fewer excuses obstructing new approaches to traditionally manual processes.
There’s no doubt the title industry has made significant gains in streamlining over the past two years. But a slower market such as the one we’re currently experiencing tends to cast a spotlight on a business’s remaining weaknesses. So we set out to pinpoint some of the areas where title operations remain more expensive than necessary and back up those assertions with specific numbers and data.
We have been measuring and polling our own clients as well as collecting data from numerous partners and peers throughout the title industry over the past two to three years. The ultimate goal of our research was to collect hard data to refute or support the premise that the new focus on streamlining and improving workflow is paying dividends.
It’s easy and common for technology providers to promise “improved ROI” or “increased efficiency” when we’re selling our various technological solutions to title agents and other settlement services firms. But for a variety of reasons it’s often difficult to provide a solid answer or empirical proof. Because so much of the industry is privately-held, there isn’t a wealth of data out there to be had from required disclosures and reporting.
And while our research was limited to users of our own RPA automation offering (many of which also employed other means of technology in their operations), we do believe that the numbers we collected are fairly representative of the impact of a wide range of technologies and other approaches to eliminating wasteful or time-consuming processes in the traditional title operation.
Here’s what we’ve found.
New options have allowed title firms to streamline even more of the production process
It’s fairly obvious that most (almost all) title agencies have finally accepted the reality that a centralized production system is a prerequisite to doing business. It’s just as important that an agent’s choice of Title Production System (TPS) integrate smoothly not only with other internal technologies, but with that of partners and, especially, clients.
It’s also clear that many settlement services firms have invested in new means of managing most, if not all, of their title searches, whether it be via technology or third-party service provider (or both). Some of the highest volume tasks, as well, have increasingly become automated — things like lien searches or policy production, maybe order entry. In short, the title industry has worked hard to eliminate keystroking and manual data entry. By and large, it would appear it’s working.
But we’ve also found that the workflow of a title agency in one market can vary dramatically from those in another. Whether it be regulatory requirements or local custom (or client demand), a title agency in one location may need to provide several disclosures or forms unnecessary in other markets, making it difficult for national technology providers to deliver solutions for every single requirement of every single firm without intensive customization. It is within these “gaps” that agents traditionally have been forced to “solve” the matter with manual processes, be it two technologies that don’t integrate smoothly or a local requirement that has no corresponding technology or service provider to offer a
Settlement services business are now automating these previously manual functions
However, as other options emerge, such as RPA technology (“bots”) or technologies utilizing AI (or both), we’re starting to see those processes once considered difficult to automate becoming more manageable. These include, for example, search updates or down dates, hyperlinking, disclosure distribution and the sending of reminders, policy production, elements of eRecording, lien release tracking, and various kinds of local or regional reporting. We’re also seeing increased options for almost every aspect of the title search or things like compliance or accounting processes.
In all of these cases, settlement services firms are increasingly becoming empowered to keep elements of the production process “in-house” without sacrificing efficiency or cost.
A sample of our findings
As mentioned above, our research into the results of our own clients (as well as a number of peers and partners to us and those clients) brought some very clear results. For example, we learned that the use of easily customizable technologies like RPA or AI allowed firms to automate large swathes of their operation previously entrusted to employees working manually.
Where the subjects of our research deployed bots to conduct the majority of their title searches (excluding the examinations), they were able to automate about 60% of the process. More importantly, we determined that, in doing so, they saved, on average, 400 hours of resource time per month — about 50 average work days of time they could redirect to other functions.
We also determined that the use of RPA technology enabled title firms to automate roughly 75% of their tax search requirements, empowering those firms to reappropriate approximately 188 labor hours per month.
“ROI” is a term liberally bandied about when any business is considering a new investment into technology or some other means of improving their production process. To cut to the chase, we were able to estimate a cost savings of approximately $410,080 annually for title businesses utilizing RPA technology to automate key functions even partially. That’s a savings of about 43% as compared to using only human resources to complete the same functions.
As noted, outsourcing to third-party providers has long been an alternative to automation for title agents seeking to reallocate precious resources and create cost savings. The scalability, especially during volatile markets, was always a key selling point to this approach. Whether using an offshore BPO (business process outsourcing) company or a local abstracting firm, there are several appealing aspects to the strategy, and real cost savings are typically seen. However, when we compared the results of utilizing RPA automation to those realized via BPOs, those using RPA saw even better results.
In this exercise, we assumed the monthly cost of a single bot to be $2,250. We assumed the bot will be utilized for a minimum of 16 hours per day for the tasks it has been assigned. We found that, for functions able to be automated with RPA, it took two employees to produce the same coverage and results achieved by a single bot.
That means that the monthly cost of a bot amounted to $1,125 to supplement one employee. That in turn means that to produce the same amount of coverage as a single employee (disregarding the advantage to bots with regard to quality and availability), an employer, theoretically, would have to pay its bot little more than $7/hour. In theory, it is an important point to consider that a bot can operate continuously for 24 hours a day, which would further reduce the hourly cost of the bot to $4.69.
In terms of productivity, a comparison of manual processes that utilize outsourcing and RPA technology is also worth noting. Our research indicated that the average number of title search updates processed per hour by a local abstracting firm is 4 and the same is true for offshore firms, although the cost for each order processed by a local abstractor ($5.50) is over double that of offshore firms ($2.50). The average for RPA? A bot can complete 5 updates per hour at a cost of $1.41 per order — a 74% cost savings compared to local resources.
Again, these numbers can and will vary by your volume, scope of work, websites/title plants used and several other factors. Our inquiry was not intended to set a standard or accurately measure the entire title industry or all of the technologies available to most. Instead, we sought to show evidence of the long touted but rarely proven (at least, in public) concept that using modern means to streamline and improve efficiencies really does bring tangible and substantial benefits.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
Jimmy Lewis is the CEO and co-founder of TrueFocus Automation, a Dallas-based provider of custom software bot development and Automation as a Service solutions to the title and mortgage industry. He can be reached at [email protected].
Sridhar Loganathan is the chief operating officer and co-founder of TrueFocus Automation, a Dallas-based provider of custom software bot development and Automation as a Service solutions to the title and mortgage industry. He can be reached at [email protected].
The entire case study upon which this article is based is available here.
To contact the editor responsible for this story: Tracey Velt at [email protected].