The audit. It’s a stressful yet necessary time of year that operates as a function to keep finances in check and business running smoothly between underwriter and title & escrow companies. The process has gone nearly unchanged for decades and no one seems to be questioning things, but take a closer look and you’ll recognize that the audit is an excellent candidate for innovation.
If it Ain’t Broke, Why Fix it?
The audit process has remained virtually untouched for decades. While email and other digital tools have aided in the delivery of files (compared to the early days of typewriters and snail mail), the process of gathering documents and managing back-and-forth communication has remained constant.
The old adage “if it ain’t broke, don’t fix it” may come to mind when examining the audit process; but look closer and you’ll see tiny hairline fractures — small annoyances that have likely become a workaround for so long that an alternative doesn’t even cross one’s mind. Take email for example. It’s a staple in the initial audit review, but is it really the best tool for communication that requires quick answers and responses from multiple stakeholders? Probably not. Those email chains pile up fast and large attachments and zip files can quickly become outdated as new versions are passed back-and-forth.
These small inconveniences add up quickly, and while they may seem insignificant, eliminating them can be game-changing. Take the smartphone for example; before this technology existed, people thought nothing of needing a separate device to access the Internet or email. Now (just 12 years since the first iPhone was released) 58% of website traffic is from mobile devices and 81% of adult Americans own smartphones. Desktop computers are rarely used outside of office work, and mobile connectivity has become a near necessity.
Perhaps it’s not completely broken processes that are ripe for innovation, but rather the processes that are integrated into routine that are the best breeding ground for transformation. Audit preparation is a routine, annual task and a common ground for title and escrow companies to consistently convene with underwriters. Streamlining the audit process may open up new ways of doing business and free up time for title & escrow companies to capitalize on the value of their underwriter relationships.
Why Hasn’t the Audit Changed?
It’s evident that the audit could be improved, and the benefits of a streamlined process would help strengthen relationships and make audits less time-intensive. So why hasn’t anyone done it yet? The economics of building a standalone audit product or upgrading existing software just don’t add up.
For underwriters, the costs associated with upgrading software to streamline document exchange with agents is costly. Underwriter software systems built in the early 2000s allow title agents to access policy jackets and CPLs; however, many of these portals have not yet integrated secure information sharing.
This lag makes sense considering the costs associated with software upgrades and the demands underwriter IT departments already face to maintain their existing systems. According to annual reports from some of the largest underwriters, a large portion of capital expenditures is spent to improve technology with the majority being funneled toward “customer-facing” technology, meaning the tools and portals used to connect with agent partners. It’s clear that leveling these systems up to achieve advanced automation and interoperability between agent and underwriter systems would be a major and expensive undertaking.
A Look into the Future – Is the Cloud Itself the Silver Lining?
At Qualia we believe it doesn’t need to be this way and that there are a few dependencies key to bringing underwriters and title & escrow companies onto one centralized system for better auditing and collaboration overall.
- Centralized communication. Instead of a flurry of emails and fragmented communication, title agents and underwriters could convene on a single platform to communicate and exchange information. This centralization also enables underwriters to view all of their accounts on one platform to prioritize and organize their work.
- Immediate access. Through automation, files for an audit could be prepared with the click of a button and instantly made available to underwriters who could easily gain access to accounting data and other details made available through title-agent-selected permissions.
- Secure information exchange. Cloud providers typically invest more in security than any one company is capable of doing. For example, Qualia provides industry-leading protections and maintains the highest-levels of security certifications. With cloud-based systems, data could be exchanged safely and reliably.
- Scalability and flexibility. Cloud-based platforms can be scaled up to meet your growing business needs. No need to install additional software. Cloud computing also allows employees to access and deliver files using any web-enabled device including mobile devices and laptops.
All of these dependencies are made possible through cloud-based software. Title & escrow companies who embrace cloud-based systems now will be better equipped for innovation that will transform and facilitate stronger relationships with underwriter partners in the future.