Building Better Relationships Through Omni-channel Lending

BLOG VIEW: Borrowers' expectations are high in today's business environment and lenders are expected to meet or surpass them. Not only do today's borrowers expect to use multiple lending channels whenever and however they choose, but they expect a consistent experience across all of these channels and, further, expect them to be integrated in real time.

A lending institution's client anticipates interacting with representatives in person and on the phone, through kiosks and via mobile applications on their laptops, smart phones and tablets. These choices are increasingly regarded as mainstream tools for improving customer experiences as expectations go even higher in relation to the evolution of technology.

The traditional mortgage banking model has long survived changes in regulation and market conditions, but the recent changes in technology trends have created a tipping point in the industry where meeting the consumer's needs requires an evolution from multi-channel lending to omni-channel lending. So, what is the difference, and how will lenders adapt to consumer's demand?

Multi-channel vs. Omni-channel

The multi-channel lending model reflects the current standard where consumers can obtain a loan at branch banks, broker and correspondent branches, and consumer direct. In essence, the customer has multiple options on how to communicate, from technology to branch, but these channels may not be working together optimally and thus create a fragmented or siloed borrower experience. Now, with digital technology, consumers (including borrowers) expect far more convenience and a lending experience that requires the use of new technologies.

The omni-channel approach takes the multi-channel approach to the next level, defined by the customer's demand for consistency across physical, mobile, digital and online channels to ensure the customer is achieving a truly seamless experience. For modern lending institutions, creating a series of consistent interactions is critical to creating an omni-channel experience.

This uniformity is essential to the overall experience of customers, who expect efficiency and accuracy during the lending process. Modern consumers also expect lending institutions to remain current on different technology and view forward thinking as a sign of health.

Additionally, the more channels a lending institution offers and maintains at a professional level, the more channels the customers will use. However, maintaining these channels at a professional level is key: If a lending institution were to over-extend its reach and add channels simply because they exist rather than meeting a noted need gained by strategic planning would be uneconomical. Therefore, lenders must carefully consider how the omni-channel model will impact their lending institution and customer base.

Re-evaluating Existing Business Models

The multi-channel lender is already looking for ways to improve communication across its business units and partners. How does a lender use multiple channels to drive a single customer view? Like any major business process change, it requires a very calculated approach, and certain steps must be considered.

Do research. Any major changes in technology strategy may be costly in the beginning but can prove a worthwhile investment with potential for significant cost savings and increased revenue generation. Because the customer's preference is a large factor in this decision, the needs of the customer should be pinpointed. And given that your employees are the key users, the employee perception is also a critical factor.

Research how your technology plans will impact your customers and employees – and consider your customer demographics when making such technology plans. One of the notable benefits to the omni-channel approach to lending lies in the ability to track the information about customers; particularly, knowledge of their location, preferences and profile. This data will allow lenders to tailor the experience to each customer, based on their interactions with different channels.

The insight gathered by institutions about customer preferences should drive decisions on the development of new products and services to produce a more coherent overall experience for the customer. Lenders should consider all age groups but especially focus on the younger, digital-savvy demographic because they are the future of mortgage banking. Therefore, make mobile offerings a priority.

Additionally, the transformation process from multi-channel into omni-channel requires educating your customers about these new channels – namely, the benefits and use of these channels. Encouraging clients to use a more cost-effective channel without educating them about how to use these channels is likely to cause clients to mistrust new channels or rely on older, less efficient channels. Monitoring this process closely is an essential portion of this implementation process.

Equally important is determining employee acceptance and their comfort level for adoption of any new technologies. Prepare an employee training program so that all employees gain complete familiarity with the new solutions. Conduct case studies and gather facts/statistics on new costs (training/implementation), cost savings and revenue generation resulting from a new integration.

In an effort to maintain stability throughout these changes, employees and customers both experience the benefits of adopting an omni-channel approach, as interactions at branches mirror the experience of customers interacting with mobile applications. This shift in handling interactions with an attitude focused on flexibility will allow lending institutions to engage customers in any setting, in real time.

Evaluating Integrations And Interfaces

Lenders should identify variances in architecture, code across systems, and technologies. They should determine which systems are outdated and/or expensive to keep up. Legacy systems and platforms should be closely analyzed to ensure they have strong interactive communications mechanisms. Lenders should also identify any redundancies that can be consolidated within vital enterprise-wide technology using service-based platforms – such as the loan origination system (LOS) – while ensuring the LOS is flexible, supports multiple channels and enables a customer-driven workflow. Workflow-enabled LOSs can support customer preferences, volatile regulatory changes and event-driven communications much more easily than older, static systems.

Lenders should interpret how the addition of new channels and technologies impact old channels and technologies, and whether they drive a consistent and optimized experience for both the back office user and on the front lines with the customer.

Match Business Priorities To Technology Options

Lenders should carefully review and prioritize their technology options based on enterprise-wide needs to create a road map for an omni-channel strategy. They should determine whether a seamless technology integration across all channels will reach the end goal of customer and employee enrichment. They should also make sure their foundational systems (core banking/lending/servicing platforms) offer enough flexibility to consolidate systems or integrate with modern technology solutions.

Finally, lenders should be sure to answer the following key question: Is the customer experience well rounded beyond technology continuity? For example, if a borrower needs educational information, a mortgage expert can be easily contacted.

As lending institutions adapt to the changing needs and expectations of their customers, the omni-channel experience remains the most effective way to interact with customers. The challenge of modern lending lies in the ability of these institutions to create the capability to handle the demands of omni-channel infrastructure. Extensive change management policies and procedures and tracking of content changes will be required to maintain, monitor and introduce new concepts and omni-channel communication strategies.

As the number of channels increase in relation to the growing expectations of customers, the consistent and clear service essential to any successful brand must be maintained. Making quality and coherence a priority through each channel is the key to success when navigating the multitude of options available to today's lending institution.

Joey McDuffee is director at Wipro Gallagher Solutions, a provider of end-to-end lending solutions to financial institutions.

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