When Clayton Christensen wrote his 1995 article, Disruptive Technologies, he probably had no idea that it would lead to executives working in every industry looking over their shoulders for the big idea that would disrupt their businesses. Of course, he was writing about the technology business, which has been my home since 1999. He was right about the disruption new technologies would bring to our lives. And his readers were right to be watching their backs. Sooner or later, every industry gets disrupted.
For the past decade or so, executives in the mortgage industry have been looking at new mortgage technologies as the source of our coming disruption, first from companies operating within our space, like the one I founded, and later to fintech firms eager to cash in on a business that had avoided change for too long. While we were watching mortgage tech’s shiny new objects, disruption caught us by surprise.
How fintech caught our industry by surprise
Shortly after I made the move from Mortgage Cadence to Accenture and took on a larger role in the business that was less focused on the technology we were developing, I began to get the uncomfortable feeling that tools had taken the lender’s business about as far as they could. Technology wasn’t going to disrupt our industry, at least no more than it already had.
My uneasy feeling turned to realization during a mortgage conference not that long ago while I was standing in the middle of a room full of lending executives who were all trying to think like IT people. When did mortgage banking change from a relationship and service business into a technology business? Banks, financial service organizations and mortgage lenders must all be tech savvy, no question about it. Though the level at which the industry is engaged in technology appears much heavier than the attention currently being paid to the borrower. Who is nurturing the borrower and enhancing their experience while bank executives are evaluating new tools?
Fintech firms were watching the customer. After all, that’s primarily what these firms brought to the table. They didn’t understand the complexities of the mortgage lending business, but they sure knew how to create apps that would keep people flapping angrily or crushing candy on their cell phones for days at a time. When our customers went online to find information about their next mortgage, they didn’t find mobile ready traditional lenders, they found fintech firms.
But the fintech surprise isn’t the disruption our industry had been looking over its shoulder to spot. It was just a symptom of the disruption that no one saw coming.
The real source of disruption in the mortgage industry
Technology didn’t disrupt our industry because technology is just a tool. Fintech firms didn’t steal away our borrowers. The vast majority of these firms don’t even lend money. All they did was be in the right place when our borrowers went in search of someone who acted like they cared about them. And that was the real disruption: when the consumer realized that the traditional lender wasn’t the only or maybe even the best option for financing their next home.
How did this happen? We disrupted ourselves when we turned away from our borrower and focused instead on implementing technology that would make our lives better as lenders, with little regard for its impact on the consumer.
It has become clear to me that significant change will only result from changing our perspective from focusing on the lender’s needs to paying intense, single-minded attention to the borrower experience, transforming it from burdensome to one of delight.
Technology certainly has a role to play -- it’s the means through which we have been able to let borrowers more fully participate in the transaction, though, if we’re honest, it’s still all about the lender.
Mortgage banking is a traditional business. It’s the business of providing financing for homes. Find a technology partner you trust to bring you a tech stack that will allow your people to create delightful lending experiences for your borrowers and you’ll beat any lender that spends time kicking tires at a mortgage tech show, hands down.
Those lenders who see the wisdom in this course of action are welcomed to reach out to my team. Find out how to get all of the technology, trained staff, proven processes and compliance assurance you need to get back to your core business, focusing on the American borrower.