Amid a surge in AI adoption and mounting cybersecurity threats, only 51% of nonbank mortgage lenders say they feel fully prepared to handle compliance risk — a warning sign in an industry that’s undergoing rapid digital transformation.
That’s according to a new joint study from HFS Research and Cognizant. “Reinventing Non-Bank Mortgage Lending Journey in the Age of AI” pulled insights from 257 nonbank lenders and ecosystem partners about AI adoption and innovation.
Some of the respondents revealed that they received up to 1,700 regulatory alerts in 2024 — 25% of them with a direct business impact.
“The fundamentals of lending haven’t changed — the loan is still a loan,” said Saurabh Gupta, president of research and advisory services for HFS Research. “What’s changed is the speed, intelligence, and precision with which it’s delivered. This is no longer just about access to capital — it’s about how seamlessly, securely, and smartly capital flows through digital channels.
“The ones who go all-in — building digital-first, modular, and intelligent operations — will define the next era of mortgage lending. The rest? They risk being left behind.”
The research describes 2025 as being a “rebuild year,” with many lenders prioritizing the modernization of platforms (37%), AI and automation (32%) and digital CX tools (28%). Yet only 21% of lenders consider themselves true innovators.
With regulatory alerts also on the rise, lenders are focusing on compliance as a 24/7 operation and using tech investments as a scalable solution. But there are legacy constraints as 58% of lenders say they can’t support real-time integration.
“We’re seeing real momentum around Agentic AI — where GenAI meets the execution muscle of automation,” said Divya Iyer, HFS Research practice leader. “But it’s not the only force driving change. Technologies like IDP are bridging the gap in paper-heavy workflows, proving that meaningful transformation doesn’t have to wait for full digital maturity.”
Despite constraints, the research estimates that automation will reach 68% of mortgage operations by 2026. It also estimates that lenders will start leaning more heavily on outsourcing as full-service partnerships are expected to rise from 30% today to 42% by 2026.
First Time Home Buyer FAQs - Via HousingWire.com
