PwC: The digital mortgage is our new normal

What are borrowers looking for?

In the constantly evolving and digitally-focused environment, even the definition of what a digital mortgage is, is changing, according to a new report from PricewaterhouseCoopers.

In its latest Home Lending Experience Radar report, published this week at the LendIt Fintech USA conference in San Francisco, PwC proclaimed that digital is now our new normal and explained how consumer expectations are shifting and what these new trends mean for lenders.   

In PwC’s study, there are three trends they observed:

  1. There’s a continual rise of digital adoption
  2. “Digital” is being redefined
  3. New opportunities are presenting themselves for lenders to provide additional value to borrowers.

Roberto Hernandez, a partner with PwC’s consumer finance division, sat down with HousingWire at LendIt Fintech to discuss how lenders can use this information to focus on meeting borrower expectations when it comes to the digital mortgage experience.

Hernandez said it’s important to understand that everyone’s needs may not all be the same. Hernandez explained that a company shouldn’t adopt a digital mortgage roadmap that suits the needs of the company, but suits the needs of the customer that they serve today and in the future.

Hernandez added that while loan officers are one of the most expensive assets for a mortgage company, technology won’t, or can’t, necessarily replace them.

Hernandez said that while there are maybe certain pockets of customers at each end of the spectrum – like those who may want to do the entire mortgage application process online and not talk to a person, or those that don’t want to be online – it doesn’t represent all consumers, most of whom fall in the middle of the spectrum and may need or want varying amounts of guidance, digital or not.

“What I think is changing, and is a big opportunity for lenders, is that digital shouldn’t be seen as a replacement of the loan officer but should be seen as an opportunity to get rid of 100% of the transactional activities that the loan officer does today, so they can spend 100% of their time on clients,” Hernandez said.

The percentage of customers surveyed by PwC who responded that their lender offered digital tools increased significantly in this year’s edition of the report, as did the number of customers who actually use those tools. PwC’s survey showed that most borrowers now make use of a comprehensive suite of digital tools from their lender, even going beyond core online application functionality.

The company explained it ran a similar analysis in determining whether customer satisfaction with each tool also correlated to higher overall satisfaction, and found that the relationship was even stronger. In other words, lenders who offer high quality digital tools have higher customer satisfaction. But, PwC noted, today’s tools have room for improvement and the survey detailed several trends the company sees that will “dramatically reshape” the tools mortgage lenders offer borrowers, including:

  • Increased automation
  • Reducing manual data entry through auto-population
  • Voice interfaces
  • A more engaging customer experience, driven by design thinking and gamification
  • Increasing choice for consumers, and ability to control how they interact with tools (e.g., guided or self-service)
  • Proactive advice and recommendations – before borrowers even realize they need help

Hernandez added that the loan officer is going to continue to provide that handholding that consumers want.  “I would like to see them with someone that walks them through their options,” he said.

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