Over the last decade, consumers have made a significant shift in their approach to purchasing decisions, demanding for higher convenience and transparency. So far, companies across industries have been slow to keep pace with the way modern consumers expect to communicate and transact. As a result, they are often left behind. In fact, over the last 60 years, the average lifespan of a Fortune 500 company has gone from 75 years to only 15 years. This is largely due to the rising costs of technology, regulatory changes and the rapid pace of product disruption. This article will address how mortgage companies can avoid disruption and become the modern lender that consumers are looking for.

While we have witnessed the rapid disruption in products and technology, many experts believe artificial intelligence will disrupt the human interaction with homebuyers and remove loan officers entirely from the equation. However, data does not suggest this will happen anytime soon. According to consumer research by PricewaterhouseCoopers, today’s borrowers prefer a combination of digital tools with knowledgeable advisors.

At the recent LendIt Fintech USA conference in San Francisco, I spoke with the principal for PwC’s Consumer Finance Practice, Roberto Hernandez, who shared his thoughts on disruption and the future of the modern loan officer. Hernandez explained, “People have been saying for years that loan officers will go away, but when we ask about the potential model, consumers say no. People value the advice of their loan officer.”

He predicts that AI will reduce the amount of time the loan officer spends actually originating so he can spend more time advising. Rather than removing the loan officer from the transaction, he says that by digitizing and automating the process, “the loan officer becomes the center of the transaction.”

Loan officers may not be disappearing from the model, but their role has certainly shifted. By consumer demand and the help of technology and AI, they have gone from originator to advisor. Mortgage advisors need to understand how to leverage technology to communicate and connect with consumers in the way that will empower their purchasing experience. 

Today’s consumers and homebuyers want to be communicated with on their terms. They want to do their research, connect and communicate with through the channels of their choice. For example, companies like Amazon and Zillow have been successful because they feed the consumers’ need for instant service and transparency. A Nielsen study found that 56% of consumers would rather instant message a business than call customer service. Businesses that respond to this demand for multi-channel availability are going to thrive in this market. Consumers and homebuyers have limitless options for lenders and loan officers to choose from, and they have nearly limitless ways to shop rates and research lenders. We are in a buyer-driven market today, which means lenders and loan officers must compete to become the “best” in modern communication and service.

After circulating a drafted definition and checklist among a mastermind group of over 3,000 modern mortgage professionals in the Mortgage Coach community, we agreed on the following definition:

The “modern loan officer” communicates and educates through the channels and methods that the consumer prefers. They use a multimedia, multi-channel approach to reach a buyer-driven market.

Many loan officers rely on outdated tech and strategies and have not shifted their approach to become the modern mortgage professional. Multimedia and multi-channel communication are key to adopting the advisory role in the modern era. If you provide quality content and have developed a relationship with your online audience, you are significantly more likely to win their business.