Efforts to establish consensus on standards and conformity have been helping to streamline markets and save money for organizations for decades. One example is the mortgage field servicing industry, which introduced a standard background check in 2013 to ensure that all field servicers were assessed to an industry standard, eliminating the laborious (and expensive) exercise for national, regional and local providers to have multiple checks done based on differing client requirements. The process of introducing this standard has worked remarkably well for the sector, enhancing consumer safety and peace of mind with the knowledge that vendors have passed an industry approved background check, boosting the industry’s credibility and professionalism, and mitigating financial and legal risk.
This kind of success is not limited to the mortgage servicing industry. Here, we outline what standards are, why they are important, and how they could be rolled out across a range of industries.
What Are Standards?
Standards are established by agreement among interested parties and create a framework of rules and guidelines for a specific activity or its results. They give both individuals and groups a foundation for mutual understanding and can be used to enable measurement, communication, commerce, and manufacturing. You will find standards everywhere. They are what allow companies to:
- interact seamlessly with each other using compatible products, processes, components
- comply consistently with relevant laws and regulation
- establish interoperability between new and existing products
- facilitate the introduction of new technologies and innovations
Why Are Standards Important?
Standards are what make things work. They may not be visible to the casual observer, but they are what specify the size or shape of a product, determine performance, and decide what is acceptable in any given situation. Standards ensure that your charger connection fits your phone, your light bulb fits its socket, and your ATM card works in cash dispensers worldwide.
The United States operates thousands of standards in different industries, including:
- product-based standards
- performance-based standards
- management system standards (e.g., ISO 27001 and ISO 22301 information security and business continuity management systems)
- personnel certification standards
- construction standards for buildings
How Are Standards Rolled Out in the United States?
The United States has adopted a market-driven, sector-based perspective on standards development. Many companies, industry associations, consumer groups, and government agencies are involved in developing standards. This favors a flexible, responsive, and efficient approach. Advocates of standards development understand that their involvement in the process gives them:
- insider expertise and early access to information
- influence over the direction of the industry
- opportunities to develop new markets for products, services, and technologies
Hundreds of standards developing organizations (SDOs) and consortia are engaged in the creation and maintenance of standards used in virtually every industry sector. These SDOs – and the experts who populate their committees – work to enhance quality of life and improve the competitiveness of U.S. businesses operating in the global marketplace. The private nonprofit American National Standards Institute (ANSI) oversees the development of voluntary consensus standards in the United States and coordinates national standards with international ones so that U.S. products can be used globally.
How Might Standards Be Introduced in Different Industries?
Many industries are crying out for easier integrations between elements including websites, software, CRMs, and automated tools. This kind of streamlined integration usually involves custom development because of poor or nonexistent connectivity. Even when companies do succeed with integration, they can become trapped by their own costly investment: If they need to modernize outdated components, they will need to redevelop their integrations.
If industry players come together to agree standards, this kind of costly, siloed integration work would no longer be necessary. Participants in working groups could agree API standards, facilitating the use of plug-and-play components and ensuring operability between different tools. Agreed standards would bring an ease of integration that introduces massive economies of scale for all involved.
By following the example of the National Association of Mortgage Field Servicers and forming industry working groups to agree standards in their sectors, organizations of all kinds could engage in truly collaborative, community-driven initiatives that would reduce costs, introduce certainty, and mitigate risk.
