A Changing Market Calls For A Change of Focus
The mortgage industry has finally started to answer the call for a digital mortgage experience. However, there is a significant gap between digital strategy investments, implementation, and results. Let’s explore the best path forward to creating a bridge amid these gaps.
Changing Consumer Needs
Technology is ever-changing and growing in the modern age. More and more companies are beginning to strategize a plan of action to keep up with growing consumer expectations. Forming a digital strategy around new or existing technology programs can help push a business to the forefront of today’s market environment. A digital strategy looks at the activities and processes that need to be transformed to provide better services for customers. A well defined and executed digital strategy helps lenders in streamlining loan origination to ultimately enhance the customer experience. To be more customer-centric, lenders should not simply think in terms of an IT strategy, but a growth strategy crafted with a fusion of digital and broader corporate strategy. However, there is a gap between the desire to make continual digital strategy investments and implementing them.
A Holistic Approach
Business consultancy group Rehmann estimates that come 2020 lenders who haven’t integrated online technology or become more customer-centric aim to lose up to 35% market share to lenders who have embraced change into their processes. There’s a general desire by many businesses to make investments in new technology. However, technology is often not implemented correctly as lenders don’t have adequate information on how to improve their workflows.
Many lenders are too focused on customer-facing (front-office) technologies, in hopes that it will boost customer satisfaction. Relying simply on front-office technology can speed up application throughput, but due to existing back-office inefficiencies, the loan closing time can still take weeks to complete. It easy to make a clear correlation with improving ROI by investing in a front-office technology such as a point of sale system. However, most lenders aren’t exactly sure how the complexity of their back-office technologies can be changed to improve ROI. Lenders shouldn’t be intimidated by this complexity and should look for opportunities to increase value in back-office technologies that drive loan origination and customer management. They need to focus on having a good balance of front and back-office technologies. Improving this balance can strengthen interdepartmental communication which allows for increased efficiency, reduced costs, and improved speed in closing loans.
Choosing The Best Option
Most lenders think a digital strategy is simply just having an up to date website for loan applications or just implementing a point of sale system. While having a point of sale system can allow borrowers to quickly submit an initial application, it can still take weeks to close the loan, which overall creates a bad consumer experience. Lenders could buy a popular product directly off the shelf, but it likely won’t serve their exact needs. Lenders need a system that isn’t just popular but tuned to the exact needs of their mortgage origination process. In choosing the right digital experience for their needs, lenders seek to partner with a trusted IT partner that they can collaborate with to create a digital strategy that integrates with their existing corporate strategy.
It is far too easy for companies to deploy these technologies incorrectly and many don’t make an attempt due to a lack of IT capacity. An advisory firm like Indica Digital is going to make the process of implementing a digital strategy much easier and over time will serve to benefit the lenders they diligently serve.
About The Author
Senior Web Application Developer
Kaustubh is a Senior Web Developer and Digital Strategist at Indica Digital as well as an adjunct instructor at High School Technology Services in Washington D.C. With a focus on Business Process Automation, API development, and systems integration, Kaustubh is often sought out to consult with business owners and provide them with the insight and tools needed to overcome digital challenges and drive optimal results.