Until now, we’ve discussed change at a minor level. While greater responsiveness and a more seamless process are important steps to undertaking a transformative experience, they are just the beginning. If the industry truly experienced a real makeover, what could the future of mortgage lending look like 10 years from now?
To consider such a scenario, imagine what your daily life could look like. With the technological advancements taking place, what if electricity could be delivered wirelessly? What if computers became disposable, to be recycled like aluminum cans? What if internet access was free, much like broadcast TV was years ago?
Whether any of these ideas become a reality remains to be seen. However, change of this magnitude would require mortgage lenders to transform how they view change — from a process that is reactionary to one that embraces what is possible. What if the industry could open up to consider the possibilities, and not the boundaries, of change?
Author David Levithan in his book The Realm of Possibility states: “Here’s what I know about the realm of possibility — it’s always expanding, it is never what you think it is . . . Most of the limits are of our own world’s devising. And yet, every day we each do so many things that were once impossible to us.”
What are the things considered impossible today that housing finance will take for granted 40-50 years from now? The sheer volume of information that is available and accessible is changing rapidly. As a result, the expectations mortgage borrowers have is being influenced by experiences in other parts of their lives. What if the function of mortgage origination or servicing, as we know them today, looked completely different? What would it look like?
Is it possible that borrowers would no longer send lenders their financial information? Let’s imagine that all the information resided in the cloud and borrowers granted permission to mortgage companies to examine the data to make an offer. As borrowers demand greater transparency and control of the process, it’s conceivable this is the direction we are headed toward. One firm is already building a model to make this possibility into a reality.
Why stop there? If information can be stored in the cloud, what if the industry went one step further with biometric identification? Imagine if prospective borrowers walked through a shopping mall and stopped at a kiosk, similar to a vending machine, to get approved. A quick retinal or fingerprint scan in between a skate around the ice rink with the kids and ordering lunch, and the consumer secured their next refinance. As futuristic as the idea might sound, the technology necessary to build such a platform has already been developed.
In many ways however, this is still the tip of the iceberg. Is it possible that in the coming years we will live in a world where the future becomes flexible enough to accommodate the things we can’t see or even imagine? The term for this is the “unknown’s unknown” — where the trends and disrupters that are hard to understand today will have a dramatic unforeseen impact on how we do business tomorrow.
The greatest potential threat to the mortgage industry is the belief that it can continue to operate as it has in the past, only allowing change to come incrementally. Mortgage lending has become so accustomed to doing things a certain way — believing that the status quo will provide for future success — that it has proven difficult to break this way of thinking.
As you read this article, there are multiple firms that know little or nothing about originating or servicing mortgages, which are determined to enter the space and redefine how business gets done. The long-term survival for today’s lender will come not only from adapting to what we already know, but embracing the unknown we have not imagined.
In hockey there is an old adage: You don’t skate to the puck, you skate to where the puck is going. Mortgage lenders should consider a modified version of the same. If you want to be the first mortgage banker to reach the consumer, make it as simple and easy as possible for them to do business with you, wherever they are and whenever they are ready.
Are you ready to imagine the possibilities? KPMG is ready to help you! Contact Mitch Siegel, principal and national financial services strategy leader, or Larry Walker, managing director, to set up your imagination meeting today.
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