Key Highlights
The report reviews the costs and path of adopting the data standards. It found that for firms of all types, benefits outweigh costs and all transition costs can be recovered within a 5-year period for all firms. Even after this transition period, the benefits will continue to accrue.
There are different paths to the adoption of data standards that can mitigate the transition costs (as observed in the US):
- Transitions are performed alongside other technology investments that are justified by business needs.
- Data standards provide a reference for any technology transformation.
- Even without modifying systems, gains can be generated as standards provide a single reference to map against, thereby making all data exchanges more aligned.
- Firms that already use modern technologies would be able to adopt with minimal efforts.
- Data standards allow firms to integrate technologies created by outside firms into their business processes.
This report covers findings from 3 studies conducted by third-party organizations on behalf of CMHC. This includes:
- Study of the Benefits of Mortgage Data Standards
- CMHC to MISMO Mapping Results Analysis Including Partner Firms
- Potential Macroeconomic Implications and Benefits of Improving Mortgage Data Consistency and Disclosure
The objectives were to:
- develop and quantify facts on those potential benefits
- identify within the current system where friction points would be most easily addressed or would generate the greatest return
- assess how existing systems of standards are aligned with the needs of the Canadian industry and could accelerate its development
Given the potential benefits identified in this study, CMHC is committed to pursuing the development of a system of data standards. This would be in collaboration with organizations that play a role within the mortgage lending ecosystem in Canada who also wish to see these opportunities come to fruition.
This report is a comprehensive analysis of CMHC’s research in the Mortgage Industry Data Standards series.
About Mortgage Industry Data Standards
This series summarizes the potential benefits and costs for the development of a mortgage data standards framework in Canada.
The first objective is to outline for the industry the potential costs and benefits of data standards. Its second is to identify processes in Canadian lending that could be improved through standards.
Data standards in the mortgage industry constitute a common reference model developed by and for mortgage industry participants. It includes commonly agreed upon definitions, relationships and processes and can be used as guidelines in:
- data models
- data exchanges
- forms
- business operations
Data standards is a proven solution in other countries (e.g. USA, Australia). This solution could help alleviate common challenges experienced by organizations involved in mortgage lending in Canada.
The report also looks at the costs and path of adopting the data standards. Based on experiences in other countries in firms of all types the benefits outweigh the costs. All transition costs can be recouped within a 5-year period for all firms.
CMHC is committed to pursuing the development of a system of data standards. This will be done in collaboration with organizations within the mortgage-lending ecosystem in Canada.
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