Many things differentiate Digital mortgage from a traditional mortgage that is applied online. An online application typically involves consumers performing a lot of data entry and providing additional documentation. On the other hand, digital mortgage intends to utilize technology and big data to eliminate a lot of manual procedures out of the process. The aim is to accelerate the origination of the mortgage by minimizing the tasks that are completed by the consumer.
Firstly, digital mortgage works by securing the data and original information needed by the lender from other sources without having to consumer go and look for. Next, from the lenders’ perspective, there are many steps involved to get this data, where they employ people to do the manual processing. With the digital mortgage, even this accumulation and collation of data is performed through comprehensive automation. The data can also be used to identify the right consumers and then target them at the right time through specially personalized offers.
A digital mortgage, thus, includes a combination of big data, behavioral analytics, and predictive analytics to make sure that lenders are introducing the appropriate opportunity to consumers at precisely the right moment so that it will resonate with them. Discussed below are some of the current trends and imminent prospects that could define the future of this industry.
Building an Experience
Lenders are looking for newer avenues to maximize the consumer experience they are offering to their consumers. In financial service in general, it’s an underserved market and there is an opportunity to create that experience. When customers experience a higher level of customer satisfaction, they are bound to come back for additional product and services.
Also, there is a need for constant innovation that has a human touch. It’s because, online consumer engagement may look very intuitive, but not all customers want to go online. Mortgage transaction it something most customers do only three or four times in their lifetime, which is usually one of the biggest financial transactions. In many cases, they want that human touch, which means they want someone to guide them by speaking to them in a language they understand. So it’s having the ability to engage the consumer and turn that interest into an application in whichever way that consumer prefers to be engaged. Thus, it is all about getting that information and digitizing the entire process, with a single aim to enhance the customer experience.
Endorsing New Technology
A proficient and successful sales team can be an important differentiator. Hence, lending institutions are trying to build capable sales team by recruiting loan officers and providing them with the best technology and tools. A technically equipped team that uses the latest tools to provide personalized service to the customers can be a real competitive advantage.
However, the lenders need to balance the need for customization with the need to move quickly in a fast-changing regulatory environment. For this, the organizations have to keep a tap on the system without compromising on the future innovations. Even the fin-tech landscape moves quite rapidly today. Tools that were used just a few years ago are already obsolete. So if they want to see themselves in a leading position, banks and mortgage companies have to stay innovative. They have to keep rolling out new products and platforms quickly. This can be an ideal formula to build success, and then by iterating on that success, they can give their customers the ability to configure the experience.
Established lending institutions could go on to process thousands of online applications, and so they should be excited about the prospects of the digital mortgage. As the industry has moved into a more purchase-centric market, there’s greater competition for fewer opportunities. In order to keep their customers happy and to make their buying experience as easy and as intuitive as possible, the lending companies have to find new ways to be more efficient. This translates into closing loans on time, removing friction from the process and speeding up the originations.
The costs involved to originate a loan have increased steadily year over the year. For lenders to be able to scale their business and make sure they are profitable they have to focus on cost-cutting initiatives. The majority of the cost today is not the expenditure on technology but is the expense of human resource. So, it’s necessary to utilize automation, but also ensure that it doesn’t take away the human touch the consumers want. Be it eliminating the manual processes, they can reduce expenses arising out of redundant procedures, and thereby minimize the cost of origination. Those dollars can be used in growing the business.
In the end, the next frontier in terms of what banks and originators need to do in order to provide more streamlined experience, would be built around mortgage intelligence and integrate that intelligence with the process. By driving people to use options to connect to source data, organizations can help the consumers understand things that they might be critical to them in the future. These are some of the approaches to building a delightful digital mortgage experience, balance customization with a streamlined approach, and broaden accessibility to loans.