The first featured speaker at the Mortgage Bankers Association’s National Mortgage Servicing Conference, David Pogue, was incredibly funny, but by the end of his presentation one thing was very clear — meeting the Millennial demands for instant gratification is going to be hard for the mortgage industry. Really, really hard.
Pogue is the host of NOVA ScienceNow and the former personal tech columnist for the New York Times. He explores technology for fun, and treated the audience to a series of amazing and sometimes baffling tech innovations to prove a point: the generation that is now coming of age expects instant solutions for everything.
From the Ocarina app that lets you use the iPhone as a four-holed flute (you've never seen Stairway to Heaven like this) to wearable tech that provides information on the most intimate levels, the universe of technology we can now access has changed the game forever.
As Pogue pointed out, every generation has a gap from the one before, but this one is as wide as the Grand Canyon. The sharing economy and the rise of artificial intelligence, in particular, look to disrupt the status quo for decades to come.
How will the mortgage industry evolve with consumers' higher expectations?
Self-serve options, while important, are just the tip of the iceberg. Mortgage lenders and servicers will need to provide "smart" processes and products that save time while delivering excellent results.
You can see the particular challenges facing the mortgage finance industry as it tries to adapt to this model. Unlike the Amazon Prime Now app that delivers a variety of things within one hour, mortgage technology innovations have to account for regulatory scrutiny and "instant" anything is hard to come by in the face of serious risks.
Just look at the scorn Quicken Loans received when it launched Rocket Mortgage — a program that seeks to make the mortgage process easier and quicker, but doesn't shortcut any of the necessary underwriting required for a mortgage.
The pervasive demand for newer and better experiences among Millennials, and all the generations after them, works against homeownership in larger ways, too. Millennials are notorious job-hoppers, averaging only two years in any given place, making their employment history harder to judge from an underwriting standpoint.
And the value they place on being mobile calls into question the whole structure of a mortgage. What are the chances they will want to commit to 30 years of payments when everything else they want is on-demand?
Pogue's talk was highly entertaining, but the implications were disturbing.
Disruption is everywhere, and the mortgage industry won't be exempt.