The Journey So Far
The clock is ticking as more and more customers have started expecting the mortgage companies to offer advanced digital capabilities. Customer expectations for speed, agility, transparency, convenience, and personalization are getting elevated by their delightful digital experiences outside lending. Customer expectations are at an all-time high in every other area of their lives, whether listening to Pandora or hailing an Uber or watching Netflix on their smart TVs.
Digital mortgage players have been on the rise, and direct-to-consumer (DTC) originations account for a growing share (more than 25 percent) of the market. While the mortgage loan process continues to be a time-consuming and expensive endeavor for mortgage companies, which are not just witnessing the challenges of meeting escalating regulatory requirements but also increased demand from their customers for a quick, painless process. Most mortgage companies have also been striving to compete profitably in a rapidly transforming competitive landscape. FinTech has also greatly improved the mortgage process; however, traditional lenders are still dominating the industry.
A look at the challenges that lenders need to overcome
Firstly, buying a home mortgage is the largest financial transaction of most people’s lives. For many, it is also the most cumbersome financial transaction to endure. What adds to it is ‘not so digital’ borrower engagement approach of today’s lenders. Most lenders continue to provide fragmented collaboration solutions that are heavily call-center-based. They still prefer to follow the traditional methods where document collection and borrower information is obtained via channels such as call contact, e-mail, portal connections, etc. Suffice to say; there is massive room for improvement. The mortgage companies need to embrace next-gen technologies to revamp their loan application process and, subsequently, the CX.
Secondly, mortgage lending is a collaborative venture. Lenders partner with an array of service providers, including credit, flood protection, fraud prevention, compliance, appraisal, title, and insurance providers, along with income, employment, and asset verification providers. Each delivers a vital element to create a loan that can be closed and sold into the secondary market. This has been paper-based work with information passed between partners in documents and forms before, which created significant time delays and errors that led to inaccurate and inconsistent data resulting in poor quality data and higher loan origination costs.
Thirdly, disparate systems are often poorly connected, impacting data quality negatively while increasing the risk of security breaches. Lending companies consider system integrations a pretty daunting, expensive, and time-consuming process to implement and maintain. Lenders need a road map to success that will guide them through the process of digital transformation while remodeling the lending process. When lenders partner with third-party providers to complete the loan process, the data moving through third-party systems must flow into the lender’s LOS.
To sum up, lenders must connect the blocks and retrospect their current redundant processes, system integrations issues, and borrower satisfaction.
Solving the mortgage riddle
Ask any prospective or recent borrower what matters most in choosing a lender, the answer will be ‘loan-to-value’ while the other important element consistently remains as ‘Customer Experience’. These are the twin pillars for most borrowers that drive their decision to go with one lender instead of others. But how do prospective borrowers figure out which lender has the best prices or provides superior CX or the speediest approval or the most reliable closing?
The 3 Secret Ingredients for the Ultimate Mortgage Customer Experience
Borrowers are consistently looking for connected digital customer experiences that can be accessed wherever they are, whenever they want. Lenders must leverage digital technologies to tap into new business opportunities to streamline processes and exceed borrower expectations and create a holistic ecosystem around the lending experience.
1. Digital Innovation- A bridge to the future
To provide a truly delightful borrower experience and take a customer-centric approach, which drives revenue growth, lenders should evaluate what the primary focus of digital technology is. Besides empowering borrowers with next-gen customer-facing technologies, lenders must also consider measuring the sensitive points in each borrower’s loan journey that end up making or breaking their delightful experience. Reassurance, simplicity, transparency, as well as speed, are extremely critical during the entire mortgage journey.
2. Borrower Data- A Secret Sauce to the Customer Journey
Delightful CX begins with understanding what customers want, which is only possible by analyzing borrower data. Leveraging data helps them understand the customer and build the proper customer journey view. Needless to say, the power of data insight is undeniable, and with a data visualization platform that can provide a 360-degree view of all data—no matter where it resides—lenders should create scalable and relevant omnichannel experiences for their customers. Understanding customer behavior, as well as their preferences, can help lenders prioritize investments in CX.
It is crucial to gather feedback across all channels to explore opportunities for improvement. Lending companies should map out their customer’s journeys to identify all touchpoints across all channels and then leverage it to engage effectively with them. Data analytics can subsequently help lenders deliver superior customer experience at a fraction of the cost.
3. AI, Automation and Analytics – 3A Solution
The right lending solution should emphasize on UX and delivers an unparalleled digital experience for consumers. It should provide a seamless and superior user experience across the value chain of the loan origination process for everyone involved, including the borrower, MLO, and the operations staff. Providing an optimized user experience from the initial borrower portal interaction until the loan is closed and funded not only delights customers but also assists in hiring and retaining key talent within the organization.
This can be done using:
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- Real-time expert assistance from experienced live loan originators, chatbots, and self-service tools.
- Data aggregation and workflow automation to quickly qualify and complete the application accurately to ensure the loan is approved and closed faster once submitted;
- Robust, rule-driven loan scenario loan calculators to play out different loan scenarios and for accurate decision making
Looking Ahead:
The use of technology in the mortgage industry will always be at a vital inflection point. Technology capabilities are available to transform the customer experience, but they have not yet been developed into off-the-shelf, end-to-end solutions. It will be an ideal time for mortgage companies to create a distinctive way of interacting with their customers, differentiating themselves from their competitors while also making their internal operations more efficient and adaptable to changing regulation. A “wow” experience for customers doesn’t have to be incompatible with reduced costs, accelerated processing, and improved compliance. The winners in the current digital environment will be the ones that leverage technology to work both sides of the equation—consumer-facing and internal operations—to stay ahead of the curve.
Digital Lending- Are you ready to transform?
Tavant FinXperience, the flagship product in the Tavant VΞLOX platform, provides personalized and configurable journeys for mortgages, HELOCs, and home equity installment loans through a suite of user-friendly portals and mobile companion apps. Using FinXperience, lenders are able to grow origination volumes by 2.5 times, improve pull-through rates by 25 percent, cut down origination costs by 35 percent, and reduce the average loan close time by 14 days.
To gain a deeper understanding of the product, reach out to us at [email protected].
