BLOG VIEW: A few weeks ago, Wipro Gallagher moderated the panel “Return on Experience: The New ROI” at the Mortgage Bankers Association’s National Technology in Mortgage Banking Conference. The panel featured executives from Capsilon Corp., Oliver Wyman Group and Discover.
When it came time for questions, a lending executive in the audience raised the point that although there is a growing number of high-tech borrowers who want digital self-service tools, there is still a large segment of borrowers (young and old) who seek a high-touch experience and more face time. “How,” she asked, “do lenders strike a balance between advancing borrower-friendly tools and innovations while supporting borrowers that prefer the more traditional experience?”
It was a fantastic question. In the quest to deliver a high-tech borrower experience via digital tools, lenders may inadvertently isolate a segment of high-value borrowers who prefer physical interaction, thus undermining the effort to drive an improved borrower experience. In lending, there is no doubt that digital transformation is required to remain relevant, and there is an abundance of new apps and portals available today. However, because many lenders still rely heavily on relationships and referrals, complete replacement of physical with digital simply isn’t sustainable.
Face time with the customer often leads to better trust and increased loyalty. In its absence, one lender can more easily grab wallet share from another if it has a more comprehensive online strategy. Lenders now have multiple challenges: engaging high-touch borrowers and keeping customers loyal. In the case of the high-tech borrower, lenders are also challenged to somehow bring the human touch to a digital format. To balance high-tech with high-touch (and to increase the lifetime value of the customer), the role of digital tools in lending should be one of augmentation versus replacement of traditional customer strategy. Digital should be used “with” and not “instead of” traditional branch and face-to-face interaction.
In other industries in which physical interaction is still prevalent and desired by the customer, the blending of physical and digital is referred to as “phygital.” In financial services, some banks are creating concierge lounges that pair a welcoming branch environment with the option of leveraging on-site digital tools if the customer wants to start the process. But if we are honest with ourselves, this really isn’t enough. The use of digital tools in the lending industry is game-changing but only for those who correctly apply the right people, processes and technologies at the right time.
To successfully balance high-tech and high-touch customer strategy and deliver an enriching and meaningful experience, lenders must invest in understanding, analyzing, mapping and solving for borrowers’ behaviors, patterns and circumstances. Lenders may also benefit from comprehensive customer segmentation strategy, with a specific focus on behavioral segmentation. Incorporating customer behavior as an element in the overall digital strategy and leveraging a phased rollout of digital technologies by specific customer segments may help minimize the risk of short-term customer attrition.
When done right, customer experience becomes more than just providing borrowers with a variety of high-tech and high-touch options; it optimizes and personalizes the use of high-tech and high-touch interaction based on the customers’ unique preferences to deliver the best possible experience. How to get there is a much longer discussion.
Sandeep Hinduja is a director at Wipro Gallagher Solutions, a Wipro Ltd. company offering end-to-end technology products and services for retail, wholesale, correspondent and consumer lenders. Hinduja has more than 16 years of experience developing product growth strategy and consulting with clients.