Merchants Capital, the mortgage banking subsidiary of $7.9 billion Merchants Bank, is automating its loan origination system, which is likely to propel the lender’s overall digitization efforts, according to Brian Sullivan, executive vice president and chief operating officer.

Carmel, Ind.-based Merchants is currently rolling out underwriting technology from Clik.ai to extract and classify data on loan applications, such as rent roll and property cash flow, and convert that data from PDF into a digestible format for the firm’s loan servicing database. Toronto-based Clik.ai is a software provider that works with other banks and CRE investors and servicers in the U.S. and Canada, including Bellwether Enterprise, NorthMarq Capital and Orix Real Estate.

The automation will have two main functions, Sullivan said. The first enables Merchants to efficiently underwrite deals and turn around quotes to clients on the origination side, by automating the data conversion. The second addresses loan servicing by monitoring the performance of the underlying property assets more easily and at scale. “It allows our team to focus more on the analysis rather than the manual conversion process,” Sullivan said, noting that Merchants services north of $11 billion in loans and has originated more than $13 billion in loans.

The adoption of Clik.ai’s technology coincides with a switch to a new loan servicing system, Sullivan said. The new database management system from SS&C Technologies will give Merchants better intelligence in its portfolio, with less manual “hand-off” and more consistency in the data. He did not disclose the prior loan service system provider. “This really coincides with what we’re doing with Clik.ai because we, in essence, have a vehicle to interpret more data so this automation of getting these data points in will gives us better intelligence in the portfolio,” he said.

Viewing the loan servicing upgrade as the “skeletal makeup of the business,” Sullivan said Merchants is already exploring additional features to tack on, including a sales CRM platform that would be integrated with the servicing platform. He also mentioned additional automation for insurance monitoring and tax payments, without specifying details.

“Our continued investment in technology solutions is absolute table stakes for competing in this marketplace and so it’s a focus area of our company to continually evolve,” Sullivan said. “We’re making the investment — time, resources — and it’s not always easy, but we hope to benefit in the long run by the fact we’re laying the groundwork today.”

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