How an agile mindset helps servicers adapt quickly to compliance changes

This year looks to be big for regulatory change, particularly for servicers, with potential changes coming for the VA servicing program, the CFPB’s Regulation X and the FHA’s partial claim process, among others.

Sandra Madigan, head of mortgage servicing product strategy and development, ICE Mortgage Technology

“As a servicer, when you are faced with this amount of potential regulatory change, it really does take a small army of people to adapt and confirm that you have the systems and the processes in place to assist you with compliance,” said Sandra Madigan, head of mortgage servicing product strategy and development for ICE Mortgage Technology. “When you don’t have agility built into your organization, it becomes crippling — you’re basically using everything that you have to stay compliant, as opposed to it becoming part of your normal, everyday process.”

ICE has built that agility directly into its organizational workflow. Madigan offered five considerations on how to incorporate and use the agile transformation mindset to adapt quickly to regulatory change.

Start with an “outside-in” approach

“If you approach the problem just from your tiny corner or purview, you’re likely to miss something,” she said.

Instead, you should think of the “Why?” rather than the “What?” of the problem. For example, in terms of loss mitigation, approach the problem from the goal of keeping more homeowners in their homes, rather than thinking of the changes to make to the waterfall for your workout.

Allow teams to fail — but fail quickly

Give your teams the space to be comfortable with failure, and to fail quickly. For example, give a team two weeks to code a solution prototype to see if it works. If it doesn’t, that failure can provide valuable information on what else on the table might not work.

“That gets you to a faster answer or resolution without spending way too much time and coming out at the end months later and realizing that you missed the mark at the beginning,” Madigan said.

Pivot fast and without mercy

“When a new regulation is proposed, when there are talks about changing certain things, our teams have a quick approach,” she said. “If the timelines get compressed, what could we do to still help our clients, understanding the time it will take our clients to implement, test and adopt any change that we make?”

Step back and break the problem down

The ability to step back from a problem and break it up into smaller processes can help with moving quickly. You can figure out what can be done differently with the resources you have and even approach problems from a different perspective to help clients mitigate tight timelines better.

Work together with industry regulators

“We have a group of people that meet regularly with regulators to explain the mindset of what we’re doing, and it’s been pleasant that a lot of regulators in the industry are starting to think the same way,” Madigan said.

Those regulators might explain their concept of a program, the reasons and benefits behind it and their approach, and you can present the same problem from a different angle.

“It may be a slight tiny pivot but we’re able to come to the real value of what we’re all trying to do, which is to help that end consumer,” she said.

With the way the industry is evolving, this ability to pivot will only become more valuable, Madigan said.

“As time progresses, we’re going to have to become nimble and agile in that way, even at a much faster pace,” she said. “Building that agile mindset within an organization to be able to react quickly will become indispensable.”

For more: ICE Mortgage Technology