Investment banker John Guzzo’s takeaway from mortgage technology conference

Around 200 companies across the financial technology spectrum showed up in sun-filled Miami for the recent Source Media Mortgage Technology conference. There were both mortgage servicers and originators in attendance, as well as companies that specifically focus on customer relationship management, automated marketing systems, and other solutions.

Key areas highlighted during the three day event including the following topics: utilizing CRMs/AMSs to build relationships with referral partners and to better capitalize on existing relationships; improving accountability throughout banks and credit unions by using profitability and ROI analysis tools; and adapting to new regulations.

It is worth noting how the growth of business intelligence and analytics has created new ways for banks/CUs to capture market share. When there are times of slow overall market growth, CRMs/AMSs become even more essential. Likewise, banks/CUs are focused on new ways to more aggressively and efficiently win new customers while maintaining existing ones.

With the evolution of online banking and the continuing change in U.S. demographics, banks/CUs are seeing less physical traffic. The demand for online marketing solutions, as a result, has become increasingly important. Furthermore, the rise in social media has given way to the need for CEOs and compliance officers at banks/CUs to be extra mindful of the types of communication being sent to current and potential customers.

Generation Y in particular is prone to do business online and less likely to visit brick and mortar offices, which presents challenges to long-term relationship building.

Given all these factors, core banking systems – including loan originations systems  – are looking to build or acquire a CRM/AMS if they have not done so already.

Certain mortgage-focused CRMs/AMSs are also looking to expand to other industry verticals such as Insurance, Health Care, and Legal. At the same time, many LOS businesses are taking steps to provide a more bundled solution, either through ongoing organic innovation or by completing acquisitions. This includes product and pricing engines, compliance tools, and eDocument collaboration capabilities.

The changing U.S. regulatory framework was another popular topic at the conference. Although policy uncertainty is rampant these days with the looming fiscal cliff, certain regulations from bills such as Dodd-Frank are beginning to have an impact. Along these lines, a representative from the Consumer Financial Protection Bureau (CFPB) gave a much anticipated address. Due to the more stringent regulations centered-around “lender-to-borrower” communications, having a CRM/AMS technology that provides controls between different layers within a bank/CU organization is vital.

With all this being said, one of most important points I will take away from the conference is how innovative mortgage technology companies in the origination and servicing sectors are well positioned to benefit from current opportunities in the real estate market.

John Guzzo is a managing director at investment banker at Berkery Noyes. His opinions are his own.

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