Sidestep the ‘go digital’ drama: Write your own script
Mortgage industry leaders—perhaps you—have started to explore the best strategy to integrate a more online approach to lending operations. Or perhaps you already have an online application and once thought, “That’s enough to meet our need for a digital solution.”
But in a milieu when the only constant surrounding “digital transformation” is the term itself, chances are you may not believe that anymore.
Research shows that more and more consumers want a simplified, superior online experience similar to all the transactions they now complete digitally every day. According to a Boston Consulting Group study of recent homebuyers released in January, nearly 80 percent would consider completing the entire mortgage process online. Beyond the fundamental factor of speed, they cited the need for easy-to-understand fees and rates, online forms in simple language and mortgage calculators that tell them how much they can borrow.
Yet legacy systems, complicated integrations and the sheer pace of change in the digital space can cause inertia. And that deer-in-the-headlights feeling. How do you define what a “digital solution” means for your bank? And with the need to maintain margins and revenue goals, how do you take the time—but not too much—to select the right long-term partner to help implement technology that’s right for you?
Vendor Surf co-founder Scott Roller, who originated a B2B vendor search engine for the mortgage ecosystem, says more than 20 companies offer some form of a digital mortgage. Many use the same language to describe varying capabilities but given the volume of players, it’s no wonder that confusion and analysis paralysis can reign.
So, where do you start?
Internal realities and realizing change
First, companies that seek a digital solution should examine their internal realities to guide their decision making. We’re not just talking about preparing for the next generation of borrowers, but also meeting the expectations of today’s consumers—who in the era of ecommerce enjoy a smooth, seamless experience in just about every transaction they undertake.
Set some priorities. What do you want to accomplish with a digital solution now and in the long term? What lending channel(s) will you target for improvement? Do you look to generate more leads and increase pull-through rates? How about making your processing and fulfillment operations more efficient?
Overall, are you dissatisfied with the performance of your aging, limited online presence? A static application with small type and lots of boxes works much less effectively in pulling a customer through the process than many of today’s interview-style formats. These incorporate behavioral science to reduce friction and increase completion rates.
Vendors as friends
Second, be realistic about what you can accomplish given your size, financial resources, internal talent capabilities and tolerance for disruption to your business operations. If you have a smaller lending operation, maybe it doesn’t make sense to build your own solution. Yet many vendors can now help you deliver a better online experience. So, rather than select a higher-priced option with a long implementation timeline, it may make more sense to tackle change in smaller, less expensive pieces. Remember: Digital doesn’t exist in a timeless vacuum. Once you take your system online, you have to continue to stay on top of the technology.
Third, identify a timeline to achieve a return on investment. The more complicated the solution, the longer the implementation period and higher the risk for unforeseen complications.
Because competition moves at a rapid (or perhaps rampant) pace—and the technology constantly evolves—waiting 24 months for a solution to kick in may not prove feasible. If the alternative can give you immediate lift, explore it. That doesn’t mean you ignore longer-term needs; it’s just fine to explore shorter-term opportunities if they generate incremental revenue.
And finally, align your vision across different stakeholder groups. Operations, sales, marketing and information technology should all share the same vision for success. We all know that when a solution has enterprise-wide support, it has a much greater likelihood of happening and succeeding.
Parting thoughts: Mortgages on the move
In the financial services sphere, lenders must adapt to the changing needs and desires of their customer base. The people who do business with you desire access to information—when and how they want is. Granted, technology cannot replace personalized service. But in the right hands, and with the right plan, it can fuel your flight path to growth and profitability.
Thus “digital solution” takes on a double meaning: What solves the problems your customers face also answers the question of how to meet them where they live—especially if that’s their first or next home.
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Michael Goyne is director of business development at Lenderful Solutions.