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Closing Call

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Breaking down the TILA-RESPA Integrated Disclosure, how it impacts your business, and ways to solve it. Written by the experts at Pavaso each business day.
Lending

What's Google have to do with mortgages?

How a recent study of digital expectations relates to lending

August 22, 2014
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This article is part of HW PartnerDirect™. What is this?

As we button up Week 50 until the TILA-RESPA go-live date of Aug. 1, 2015 — the first week of starting project research and budget approval from the Lender Implementation Timeline — let’s take a break and talk about the future beyond TILA-RESPA (which, by the way, is not as far off as you would think).

But why think that far ahead when we’ve got our hands full trying to comply with the immediate regulations?

Well, timing, for one.

Right now, you’re beginning to look at business processes and operations during this research and budget phase of implementation and compliance with TILA-RESPA.

As you draw up that gap analysis of your current state, versus what your business should look like and how it should perform come August 2015, you shouldn’t be focusing purely on a strategy that will only get you to that date. If you do only that, you’re treating technology solutions like an expense, and not an investment that you expect to get a return on.

With that in mind, let’s sift through some info that is out there on the good ol’ net that all of us can consume, ponder, and potentially put into action in some form or fashion.

First, let’s look at how the tech giants have not only had an impact on how we accumulate and interact with data in general, but could potentially throw their weight into the financial industry. An interesting article at RealtyTrac titled “Would you bank with Google or Amazon?” discusses just this very topic.

In that article, they cite a study by Accenture (a global management consulting firm) titled “The Digital Disruption in Banking” which summarizes statistics from their 2014 North America Consumer Digital Banking Survey. Here’s the four key findings that the study points out from their survey of 4,000 North American retail banking customers:

  • 27% would consider a branchless digital bank
  • 71% percent consider their banking relationship to be transactional rather than relationship driven
  • 51% want their bank to proactively recommend products and services for their financial needs
  • 48% are interested in real-time and forward-looking spend analysis

So what’s that got to do with Google, Amazon and mortgages? As the RealtyTrac article points out — how about the attention that these, and other big brands such as Apple and Disney, give to the consumer experience? Mega tech-brands like Google and Amazon not only have the deep pockets and relationships to enter the space if they wish, but also have the hardware and software framework of the digital channels required to deliver a trustworthy consumer experience around something like a mortgage.

While that seems like a stretch, let’s look at one of the stats from Accenture’s study a little closer – the 71% who consider their banking relationship transactional.  This can basically be read that nearly three out of four Americans only view their banking relationship similar to something as menial as an app on a device, and not a relationship with a financial institution that can advise them or provide them with appropriate financial products. Products, that by the way, 51% of the same people want their banks to proactively recommend.

And yet, people fork over their personal information to Google and Amazon every day in the interest of purchasing online, being the first to provide a comment or review of something, or get suggested products based on their past purchases in their transaction history.

And love ‘em or hate ‘em, there’s also a ton to learn from social media giants as well. The big ones like Facebook, Twitter and LinkedIn understand how the end-user experience affects consumer trust, customer retention, and ultimately their bottom line (privacy issues aside, right Facebook?). While they do have the advantage of being built from the ground up in a digital space, much of what they put into play and the principles that drove them can easily carry over to the mortgage industry.

That said, the Digital Close product that we’ve built on top of our Pavaso Platform addresses TILA-RESPA compliance, and goes beyond it to enhance the consumer experience. The video we posted at www.digitalclose.com provides a great overview of a technology solution available today that can help your organization achieve that next level required in a digital transformation.

Whether you’re looking for digital delivery and signing, online collaboration with consumers and business partners, or the capability to overlay hot spots on documents and forms that provide interactive educational materials to the consumer, Digital Close addresses and exceeds the consumer experience challenges lenders will face in TILA-RESPA changes.

For a variety of information on solutions to these issues, visit the TILA-RESPA Knowledge Center, where you can register for a free account to browse a knowledge base of articles and documents, or join conversations in the forums.

All information and views expressed or implied are provided without warranty and are only opinion. Each participant should seek legal representation for legal interpretation of the ruling and the CFPB directly for final instruction and interpretation. The final rule can be found here.

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