The past few years have seen a tumultuous change in the mortgage industry as many servicers struggle to keep pace with stringent regulatory requirements, increasing per-loan servicing costs, operational challenges, fragmented view of the customer and rising consumer expectations.
But what if this reaction could be less about just keeping up with the changes and more about a paradigm shift to a focus on what the borrower wants and needs?
Recently, when Fannie Mae surveyed mortgage executives, one of the notable points of the survey was the use of next-gen technologies to improve the consumer experience across the loan life-cycle.
However, most lenders agreed that there are many significant barriers including cost, implementation, and integration issues that are holding them back.
- 38% agreed high costs is the biggest challenge
- 23% said implementation of next-gen technologies is too difficult
- 20% found integration as a complex issue
- Two-thirds of lenders have not used next-gen technology vendors at all
So, what are the ingredients of the ‘Secret Sauce’?
Well! It’s the Customer Experience, which is a Journey of Expectations
Personalization is more important than ever
Customers expect personalized services, and it can be difficult for consumer lending organizations to deliver. Not because they do not have the desire, but because of legacy systems and regulations that restrict them to the traditions of the past. These constraints hold them back, even while they recognize that location and products alone are not enough to attract and keep empowered customers.
A Good CX Means a Loyal Customer
The customer is equipped with loads of information before even making the first contact; they are not that loyal as they look for the best deal and are likely to maintain a relationship with more than one financial institution.
A recent report from Deloitte (Reshaping the retail banking experience for the customer of tomorrow) reveals the importance of positive customer experience:
90% of customers trust a recommendation entirely; they are seven times more likely to trust a reference than an advertisement. If a customer encounters poor customer service, he or she may never come back and will advise their friends as well to do the same.
Transform Destination into a New Beginning
Of course, integration of multiple systems is complex and one of the major challenges faced by lenders. But that should not impact the experience when it comes to quickly processing a loan. Think if your customers get an even better digital experience towards ending of processing cycle, the chances are bright when they are looking for next loan.
The opportunity for change:
- How many loans originated this year? How much do you want to grow loan revenue?
- How many loans are processing on average? Do you want to raise this number?
- How long does it take to process a loan? Average wait time and processing cost?
- Are you expected to reduce these costs? If yes, then by how much?
The answers to these questions can help you refine your vision for the future of your lending activities, and nurture discussions with your solution partner helping to pave the way to measurable improvement.
LOOKING AHEAD
The digital transformation underway in the mortgage industry is undeniably not a fad. Digital solutions address numerous industry challenges. The technology and process transformation will provide a single view of the customer and personalize the customer experience, spur innovation within services and products offerings, increase compliance and cut down origination costs. Lending companies and mortgage servicers must embrace digital solutions to stay relevant.
Migrating from a legacy mortgage model to a digital-solutions-based model will require dedicated organizational alignment. Remember, digital is not just a box to be checked or leveraged only for pointed solutions to specific problems.
Are you off late having a train of thought?
How to modernize, measure and manage a mission-critical runtime environment and partner ecosystem that is high-performing, robust, efficient and responsive to change?
Tavant’s AI-powered digital lending solution can help you:
- Reduce application processing time
- Reduce the cost of the overall process
- Better control over the process and reduced error rates
- High visibility on loan application status across the organization
- Increase customer satisfaction and business, and enhance employees’ efficiency
Do you wish to explore further?
E-mail us at [email protected] to schedule a meeting.
Innovative Lenders have altered their way of doing business to not only roll with the industry changes but also thrive in – and even help drive – the transformation. We will discuss this in our next blog.
