How to survive this “unprecedented” era of digital mortgage

6 trends lenders need to pay attention to

Writing about digital mortgage in 2021, I am reminded of a cartoon in the New Yorker, in which two cavemen were starting a fire and one said “Stop saying everything is ‘unprecedented.’” After a year of unprecedented everything, including mortgage volume, it’s hard to fathom the level of fintech disruption that is approaching financial services and specifically mortgage. 

Pandemic or not, artificial intelligence and consumer expectations have been accelerating at “unprecedented” levels all on their own. Last year, traditional institutions were forced to manage their businesses remotely and consumers adapted to completely digital purchasing experiences. The digital experience has changed forever, and no one is turning back. 

While lenders continue to have record volume in 2021, they cannot ignore the digital revolution that will either make or break their business in 2022 and beyond. In this article, I’ll highlight just a few of the biggest trends I believe will impact the way consumers interact with mortgages in the near-to-present future. 

#1 Personalization

As demonstrated in the brilliant UWM Superbowl ad, Millennial homebuyers are looking to technology to match them with the right partners in life, including their mortgage. I can set filters for my partner search on Bumble, so why can’t I filter results for a mortgage broker? These are the kinds of questions consumers are asking when artificial intelligence is powering every aspect of their lives, except the biggest financial one. With smarter and faster data, a personalized service experience is key for the future of lending.  

#2 Digital adoption

While Blend has led the industry in capturing 25% of the mortgage market, they have also been challenged with low adoption rates. However, the Point of Sale category took a turn for the better in 2020. Bank of America recently reported that their digital mortgage transactions have nearly doubled over the past year, citing 68% of all consumer mortgage sales were made digitally in 2020, compared with just 36% in 2019. 

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I surveyed five different lenders and all reported an increase in digital adoption of approximately twice that of the previous year, and most lenders are deploying strategic initiatives to increase POS adoption. From a consumer’s perspective, the idea that we wouldn’t be able to connect our bank accounts and financial records in an app is already perceived as archaic. 

#3 Self-driving banks

Digital mortgage applications are the minimum expectation for consumers today. Consumers are using robo-advisors and intelligent chatbots like Charlie or Albert to make financial decisions, or often to have those decisions made for them. Chatbots are expected to become more human-like and automate up to 90% of banking interactions by 2022. 

While consumers will expect automation, they still want a live expert when it comes to more complicated discussions like mortgage. Lenders who excel in this environment offer more than just a digital application and a phone call. The best lenders leverage technology to create personalized presentations of loan options that help borrowers make smarter decisions and empower loan officers to have more productive and efficient conversations with their customers.

Good technology should be the language loan officers use to communicate with their customers, not their replacement.

#4 Don’t show me the money

In the digital economy, the way you pay is integrated into your experience. Ride-sharing apps, food delivery, and video streaming connect to your credit card so that you pay within the platform rather than exchanging money or paying a bill. And in a world where cash became dangerous, brick-and-mortar stores transitioned to digital wallets, as demonstrated by a 59% spike in Apple Pay adoption since March. Even my 80-year-old internet-hating grandfather became an Amazon addict last year. 

The demand for touch-free shopping experiences will fuel the increase of a completely mobile-first mortgage experience. Hybrid and eclosings skyrocketed in 2020, and most lenders are deploying strategic initiatives to increase POS adoption. 

#5 Technology becomes fintech 

Technology startups are making banking more accessible. It’s not deregulated finance as many called for in 2012, but they are offering the agile customer experience with consumer finance. 

Last December, Stripe announced its partnership with Goldman Sachs and Citigroup to offer banking services to businesses like Shopify. With Banking-as-a-Service (BaaS) products coming available, consumers may access more financial services through companies like Amazon rather than Wells Fargo, resulting in higher expectations for digital CX. BaaS expert Cokie Hasiotis, explains that banks are not built for the kind of innovation and product delivery that today’s consumers demand. She says that while infrastructure providers quickly evolve, the model, “inherently relies on banks’ ineptitude.” 

People want a digitally native purchase experience, and they’re sick of hidden fees and terrible support. Lenders that survive will be those who recognize the demand for technology, allow brands to integrate with them, and invest in improving their customer experience. 

#6 Customer experience management

Lenders may find it near impossible to manage customer expectations for an Uberized experience of everything, but the best ones are using customer feedback and big data to drive their customer experience. 

Customers know they have a voice, and they want to use it to improve the future of your business. Your customers will direct you to make smarter decisions about ways to improve your customer experience in the short-term and prioritize changes in the long-term. Customer-centric decision-making is the key to success in this unprecedented era of digital mortgage. 

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the author of this story:
Kristin Messerli at [email protected]

To contact the editor responsible for this story:
Sarah Wheeler at [email protected]

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