Absa Bank has introduced a new, fully automated, mortgage loan application system that will contribute towards a saving of around R200 million per year in operational costs, while substantially improving customer service.
Dubbed AutoVal, the system was designed in collaboration with Computer Associates (CA) Technology Services in a bid to electronically enable the home loan granting process, thus improving efficiencies and turn around times.
Kelly Clinton, Absa`s general manager, Repossessed Assets and Valuations, Real Estate Asset Management, says the new system will have a positive impact on Absa`s home loans business.
"AutoVal is the result of a strategic alliance between Absa and CA dating back to 1997. It is part of an overall 'e-strategy` that Absa has deployed to increase internal efficiencies and gear the bank for compliance, in 2004, with the Basel II Accord governing risk management in business," he says.
"By speeding up the property valuation process, AutoVal will ultimately speed up the loan granting decision, while reducing manual interventions and paper-based processes to an 'exception only` basis."
Previously all property valuations at Absa were performed manually via a labour-intensive process, which involved the handling of a large number of documents and the manual duplication of data capturing on unlinked systems.
"Now AutoVal will generate valuation requests electronically and they will be routed to a central computer system where more than 1000 valuations can be performed per second through the pre-programmed intelligent valuation component built using the CA Aion Business Rules Expert system," explains Clinton.
"The rule in the system allows for an almost infinite number of permutations of property type, location and many other criteria. It matches the permutations on the valuation request with those in its database and a property valuation is generated. Currently, the property assessment range is between R10 000 and R1.2 million.
"In pilot testing we have achieved a tolerable - 84% to 90% - accuracy, when compared to the traditional human intervention valuation processes," he says.
AutoVal will allow Absa to save around R100 million per year alone through reducing its reliance on on-site visits for valuation purposes. However, should they be necessary, Absa will not deploy its own staff. It has partnered with a black-empowered company to execute this process on its behalf.
Additional benefits of the system - which is expected to be fully operational countrywide in two years - will include more efficient workload allocation within the bank and significant time and cost savings associated with the elimination of data capture duplication.
"A major benefit," adds Clinton, "is that we will be able to determine realistic valuations for the existing 600 000 loans on Absa`s books in a matter of weeks using AutoVal. Performing this task manually would have taken two years, according to our calculations."
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Computer Associates International, Inc (NYSE:CA), one of the world`s largest software companies, delivers software and services that enable organisations to manage their IT environments. Focus areas include network and systems management, storage and security management, portal and business intelligence, and application lifecycle management. Founded in 1976, CA is headquartered in Islandia, NY, and operates in more than 100 countries. For more information on CA, please visit http://ca.com.
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