Data drives decisions, or at least it should. Mortgage lenders know this, which is why they have invested so much in Business Intelligence (BI) tools they hope will allow them to stay competitive. However, even with the rise of these tools, decision-making can still feel like a leap into the unknown.
It’s not that lenders don’t have enough data to make better decisions. They have too much data to analyze ahead of their decision.
Business Intelligence, with its emphasis on reporting and dashboarding, provides lenders with plenty of historical data. But here's the catch: these tools can sometimes overwhelm more than they help. Data points are scattered across reports, offering a rearview mirror look at your business.
In lending, where competition is fierce and the stakes are high, relying solely on BI can leave leadership second-guessing their next move.
But there is a solution. Data science is the answer to the limitations of BI.
How Data Science Bridges the Gap
A McKinsey report as early as 2011 warned of the danger of information overload—something many lenders are experiencing now. Decision-makers are drowning in data, unable to find the signal in the noise. This is where traditional BI tools fall short.
Unlike BI, which often leaves leaders with static reports, data science uses machine learning, AI, and predictive modeling to help lenders anticipate future trends. It looks beyond what has happened and explores what will happen, giving executives the clarity and foresight they need to make confident decisions.
By implementing data science practices, lenders can transition from managing data to leveraging it strategically, identifying trends, predicting borrower behavior, and ultimately closing more loans.
We’re already seeing the industry move in this direction. Recently, Rocket Mortgage hired Papanii Okai, formerly with Venmo, to “further beef up AI offerings,” according to published reports. Others will follow suit, hiring AI Directors and Chief Data Officers. These executives will build data science departments, if they can.
The path forward is clear: BI was just the first step—data science is the future. To find out more, see our feature article in Scotsman Guide or reach out to us directly at info@rbiplaybook.com.
Comments