IBM, Fenergo to assist new customer onboarding 

IBM has teamed up with Fenergo, a provider of client lifecycle management (CLM) solutions for financial institutions, to further expand the IBM Cloud offerings in the financial space by introducing the IBM Customer Lifecycle Management (CLM) with Fenergo.  

Designed to incorporate artificial intelligence (AI) from IBM Watson, and analytics on the IBM Cloud, the new offering reportedly aims to help lenders and other financial institutions make customer onboarding more time and cost efficient by improving personalization, risk assessment and regulatory compliance.

According to research conducted by Forrester and Fenergo, financial institutions that have implemented partial onboarding technology only, may need between two and 12 weeks to complete onboarding a new client. 

Financial institutions also face financial penalties and sanctions if they do not comply with anti-money laundering (AML) and know-your-client (KYC) regulations, which represent yet another layer of onboarding risk. 

“Compliance can be time consuming and costly, often diverting resources from the core focus of improving the customer experience,” said Likhit Wagle, general manager of global banking at IBM. “Artificial Intelligence is ideally suited to redefine how regulatory compliance is addressed.”

The collaboration with Fenergo is one of many ways IBM is assisting financial institutions’ efforts to digitize customer experiences. Through its ecosystem of partners, IBM Watson enables banks, insurers and other financial providers to streamline onboarding and compliance, as they focus on their clients’ needs. 

Built for multiple types of financial services such as insurance, mortgage lending, retail, wealth and asset management, the new offering can run on premises or on the IBM Cloud. 

IBM CLM with Fenergo enables financial institutions to provide a single, connected client journey from initial interaction, through to investor or fund onboarding, and lifecycle events. It blends Fenergo’s expertise in digital customer journey, CLM experience and regulatory workflow with IBM’s RegTech Watson powered portfolio of AML and KYC solutions.

Currently nine out of 10 Fortune 500 banks and financial institutions use IBM Cloud, the tech giant said in a statement, while IBM expands its offerings including via partnerships and continues to invest in hybrid cloud ecosystems, particularly for the financial services industry.

IBM reportedly created the Hybrid Cloud Ecosystem to pursue an estimated $1.2 trillion hybrid cloud opportunity, where ecosystem partners “play a major role in helping clients modernize applications and migrate, mission critical workloads to the cloud.” 

The IBM Cloud for Financial Services is an important part of the ecosystem launched in July 2020 alongside Bank of America and more than 30 partners.

In today’s challenging business environment, lenders and other financial institutions need customer friendly CLM systems to automate regulatory compliance, said Julian Clarke, head of partners and alliances at Fenergo. 

The new offering incorporates analytics on the IBM Cloud to help lenders and other users assess the risk profile of a new customer, via metrics such as geography, money-movement behavior and network. It also uses AI built on IBM Watson to compile an analysis of the customer’s reputation based on publicly available information. 

Ultimately, the fused technology helps users streamline the risk assessment process, reduces manual intervention due to unnecessary errors, and frees up time.

In addition to collaborating with Fenergo, IBM can drive adoption of IBM CLM with Fenergo through its global alliance with Salesforce.

Black Knight: Serious delinquencies improve in September

For the first time since the start of the pandemic, the September 2020 month-end, loan-level mortgage performance statistics reported by Black Knight, Inc. improved. Data show the national delinquency rate, which includes loans 30 or more days past due, but are not in foreclosure, fell to 6.66% in September, down 3.10% month-over-month. 

Compared to a year ago however, the rate is 89.03% higher.

Also on a monthly basis, the number of seriously delinquent mortgages – or 90 or more days past due, but not in foreclosure – fell by 43,000 in September, marking the first such improvement in serious delinquencies since the start of the pandemic.

Nonetheless, more than 2.3 million homeowners, up to five times the number of properties that were more than 90 days delinquent at the beginning of 2020, remain seriously delinquent, which is nearly 1.9 million higher on a year-over-year basis.

Similarly, early-stage delinquencies “continued to show strong improvement,” as rolls from current to 30-days delinquent, and the number of borrowers less than 90 days delinquent, returned to pre-pandemic levels.

The number of properties that are 30 or more days past due, but not in foreclosure reached 3.5 million, down 137,000 month-over-month, yet almost 1.7million higher compared to the prior year.

At the same time, both foreclosure starts and foreclosure sales continue to remain muted given the widespread foreclosure moratoriums still in place. 

Total U.S. foreclosure starts were at 4,500, marking a 25% month-over-month decline, and nearly 86.6% lower compared to a year ago. Meanwhile, foreclosure sales as a percentage of seriously delinquent loans were at 0.08%, which is almost 34.5% higher from August, but more than 95% lower year-over-year.

After a slight pull back in August, the report notes, “prepayment activity jumped above 3% in September for the first time in more than 16 years, fueled by record low rates and an elongated home buying season.”

The top five states by non-current percentage of all loans in the state were Mississippi 11.54%, Louisiana 11.15%, Hawaii 9.15%, New York 8.92%, and Texas 8.76%.

Luxury industry experts’ forecast for 2021

How will the global luxury goods and services industry evolve in 2021? The Luxury Institute, its Global Luxury Expert Network (GLEN) members, and a select group of C-level executives at top-tier luxury brands recently reported their global 2021 projections for the top luxury categories – compared to 2020 – and why they predict each category will be up, flat or down. 

Here is a short list that covers the Luxury Institute’s report for the categories of consumer technology, home furnishings, home appliances and real estate. 

  • Consumer technology – An impressive 90% of the survey participants expect this sector to stay resilient and say up, while 8% say flat and 2% say down. Cited growth drivers include exponential demand growth for new and upgraded solutions for the home and home office spaces, health and wellness, wearables and the Internet of things to stay despite the recession.
  • Home Furnishings – At 68%, most say up, but 24% say flat, and 8% say home furnishings will be down. What’s the reasoning behind the overall positive outlook? Home expansions and upgrades, a new focus on home/home office improvements and personalizing spaces, and continued positive real estate trends. This sector has lower recession risk. 
  • Home Appliances – Similar to home furnishings, 56% say up, 42% say flat and 2% say this category will be down. Key reasons cited include more time spent at home cooking,technology innovation drives upgrades, need for new home office/improved office, and home entertainment. Yet lack of a vaccine tempers demand. This category also has lower recession risk.
  • Real Estate – More than half, or 53%, say up for this category, but 27% say flat, and 20% say real estate will be down in 2021 compared to 2020. Reasons include urban flight, new zoom towns, low mortgage rates, low supply, repurposing of urban commercial real estate to residential. 

Even though recession risk will be lower given the low supply and low affordable interest rates combo, survey participants think the real estate sector still faces risk due to foreclosures and a possible recession.

On the down side – department stores did not fare well among the respondents. Almost half, or 46% of the survey participants say in 2021 the market be down, 36% say flat, and only 18% say up. Reasons include fear to shop in-stores and preference to buy online, few tourists, bankruptcies, a second wave of COVID-19, and the need for a vaccine, all of which are challenges expected to remain for the long-term. 

While no one can predict the exact trajectory of the pandemic and its short and long-term effects on the economy, “history indicates that human resilience and ingenuity, propelled by the drive to not just survive, but to thrive, usually fuel recovery,” the Luxury Institute noted in a statement.

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