Whenever I write about the state of mortgage tech, I like to refer to this article from 2018, which highlights 11 tech companies “revolutionizing” mortgage lending.
The title of that article points to one of the biggest problems I see among lending companies looking to modernize their operations with new technology: While the promise of the newest platforms and tools are never anything short of revolutionary for the status quo, the reality many lenders experience often falls short of revolution.
So what gives? Often, it’s as simple as insufficient adoption rates among originators and others who are supposed to benefit from the tech.
This is both good news and bad news for mortgage lenders: on the positive side, the technology available today really is remarkable and does have the potential to transform the way mortgage lending happens. On the negative side, boosting adoption rates can be tricky.
Here, I’ll offer some insight into why tech adoption often falls short of expectations and how mortgage lenders can ensure that their teams actually use the software they’re paying for so that they see the returns they expected on their investment.
Why originators don’t want to use the new tech you’re paying for
It can be incredibly frustrating for mortgage lenders to invest in a new technology platform, only to find out that your originators aren’t using it. It’s a bit like signing up for a gym membership at the start of the new year, but not seeing any improvements in health or fitness as a result.
That’s because, like a gym membership, mortgage tech can only lead to improvements if it actually gets used.
Most of the mortgage tech on the market today has the potential to make life much easier for originators, and most originators know this – and yet, it’s still often difficult to convince them to adopt new platforms. Why? For the simple reason that changing processes is hard.
Think about it: if your compensation is based on how many loans you close and you’ve become efficient at closing loans with the tools you’ve had access to for years, why would you willingly adopt new tools? Learning a new system takes time. And in that time, you’ll be slower than you were with your tried-and-true techniques, which means you may slow down the speed in which you can originate.
Just as those first few miles on the treadmill can be miserable, the first days of using new software can be frustrating as originators learn where everything is and how it fits in their workflow.
Leaders at mortgage lenders should focus on helping originators get over the initial transition hurdle with deep training and hands on support. This will become increasingly important in the coming years.
Changing expectations for mortgage technology
Since 2016, millennials have been the largest generational group in the workforce. And 45 percent of them say they’d leave a job with subpar technology. While millennials may not yet make up the majority of originators, it’s important for lenders to understand the priorities of this age group, as they are the future of the workforce.
Outdated technology may not bother experienced originators who’ve been in the field for years, but millennial applicants will likely be deterred when organizations don’t have software that lets them do their jobs efficiently.
Another key consideration: millennials now also make up the largest portion of homebuyers. These digital natives have no shortage of borrowing options, and will naturally flock to lenders that offer streamlined, digital processes powered by the latest in mortgage technology.
Given these realities, helping originators over the hurdles of adopting new tech becomes even more important. Here are some strategies for doing that.
How to get originator buy-in on new mortgage technology
Whether you’re introducing a solution to digitize signatures or adopting a fully digital, end-to-end origination platform, following these four steps can help improve originator adoption rates of your new tech, which in turn will improve the returns you’ll see.
- Involve originators in the shopping process. The people who make final decisions on new technology purchases are rarely the ones who will use it every day. As soon as you start considering new tech, get your originators involved. Ask them about their current pain points, invite them to sales pitches and demos, and encourage them to ask questions at every phase of consideration. Originators will be much more willing (and eager) to adopt new technology if it actually solves the problems they’re having.
- Get top performers to adopt first. It’s unrealistic to expect everyone in an organization to onboard on day one, so it helps to have a strategy. What tends to work well is getting buy-in from a few top performers and those with leadership status among their peers. Support them and help them see strong results. As their production improves, word will get around and other originators will be eager to learn how to mimic their success.
- Celebrate successes internally. New tech lets originators do more, faster, which means they can take home more money. Find ways to emphasize this reality so that holdouts will understand that there are tangible benefits to adopting.
- Find compliant ways to incentivize adoption. Some reluctant originators may need an extra nudge to adopt new technology. One way to provide that is to compliantly incentivize adoption – for example, by assigning one raffle entry for every loan originated with the new technology. The key here is to make sure you’re raffling off things originators actually care about – a winter getaway, for example, or a generous gift card to a popular restaurant.
Once your originators are comfortable with the new technology, chances are good that they’ll be glad they converted. After all, the whole point of today’s crop of mortgage tech is that it makes life easier for them and their customers.
For better mortgage tech ROI, focus on adoption
We’re living in a golden age for mortgage technology. While technology firms were slow to enter the mortgage space, largely because of its many regulations, they’ve finally awakened to the opportunities it offers. Lenders looking to improve operations for their employees and their customers are smart to explore the many tech offerings that have the potential to revolutionize mortgage lending.
Success won’t happen just by buying and installing new software, though. For the type of return on investment promised by mortgage tech sales teams, it’s essential to make sure you’re providing an adoption roadmap for originators and other users. Without that, you’ll likely see underwhelming results, no matter how great the potential of your new tools.