PERSON OF THE WEEK: Mortgage lenders have now fully realized that the transition to an all-digital mortgage process is critical to their success. While there will always be a need for an in-person, human touch, consumers are expected to increasingly gravitate toward an entirely automated, all-digital mortgage experience.
To an increasing degree, borrower satisfaction will be driven by the quality of the digital mortgage experience that lenders deliver. In other words, technology – and they way it is used – is now a key differentiator. The challenge now is how to build customer loyalty – a task that was difficult before the digital mortgage came to fruition.
To gain some insights into what mortgage lenders should be considering when planning their future technology roadmaps, MortgageOrb interviewed Matt Wood, business solutions manager at Tavant, which offers an all-digital front-end origination platform for mortgage lenders.
Q: In this unprecedented compulsory transition to digital, how do mortgage companies remain, retain and grow their new digital footprint?
Wood: Up until now, digital has meant smoothing the transaction and changing the manufacturing process. We are entering into a kind of digital agility necessitated from the need to build upon this great leap the industry has undergone in the first half of 2020. The boundaries are shifting and the definition of digital is changing also. Breaking down the barriers between all the different players in the life of a mortgage decreases friction, enhances the customer experience and helps to move the industry away from the transactional and towards the meaningful.
This is what the promise of digital is right now. One of the emerging realizations of this is the collaboration at the data level between different parties throughout all the moments of creating a mortgage. Realtors are using new kinds of video and photo technologies that are very useful to an appraiser, for example, while reducing the hassle and time to do their job. With a higher quality of data, we can start eliminating the need for certain steps in the process.
Q: How do mortgage companies understand and support the intentions of digital shoppers?
Wood: Being in concert with the consumer at the moment of intent, is the goal of every mortgage company, and essentially, every consumer-facing business. For lenders, understanding intent is the beginning of creating a thoughtful and fruitful relationship.
A living example of this would be understanding the difference between someone that is shopping for a home versus someone that is ready to buy a home. Or being able to tell the difference between someone whose property is appreciated versus someone else whose property is appreciated and they are interested in a refinance.
These are the kind of real-world events that we have to, as an industry, figure out how to respond to with assurance. We have been forced to become digital, but really, we’ve become digital in terms of the transaction where we haven’t become truly digital in terms of our relationships.
Once intent is known, there needs to now be follow up. Not a digression, but an expansion of the artificial intelligence (AI) and machine learning (ML) algorithmic need. This is somewhat of an industry marker and is a message coming from many different directions around how to apply data to the reality of a customer relationship. The independent mortgage banks themselves are looking for the indication that it has stopped being a difficult thing to get-to later, but has now become the strategic move we need to make today.
Q: How do mortgage companies generate a new type of digital relationship by looking beyond the transaction?
Wood: To take a step back and look at the mortgage industry as a whole over the last four years, we’ve made some necessary steps towards improving the process for consumers, but nothing has been largely innovative. Mortgage companies have built portals for web experiences to actually facilitate digital transactions, but where do we go from here?
The internal workings of refinance transactions for example, and how that process works throughout each state for the consumer – something that many folks are doing right now – tends to break down towards the end. This problem is two-fold. On one hand, the mortgage companies are not necessarily equipped to absorb current volumes, and on another, communication becomes somewhat of a black hole.
In the initial phases of digital platform interaction with consumers, communication is oftentimes great. There’s a really dynamic back and forth between you and your loan officer ensuring that all the boxes get checked. Once processing is nearly complete, the communication black hole emerges when the loan officer isn’t necessarily willing to be a digital communication channel to the borrower. This is a chronic problem across the board and there’s very few companies that have actually solved this question of solid customer experience throughout the manufacturing process of a mortgage. But really, it’s a no brainer and can be solved through the tools we have. Ensuring a strong relationship throughout every stage is very attainable through good digital decisions.
Q: If you could go back in time, what advice would you give to your younger self as you were starting out in the industry?
Wood: I often see my customers choosing to implement solutions or technologies that are quick to implement and quick to have value.
That sounds great, right? But that’s not how you build strategy. If all you do is focus on low hanging fruit, you end up with low hanging value.
When I look back at my career, I think one solid lesson is finding ways to connect the dots for your client or for your company between the things that are higher order complexity and higher order value.
Because when you do those things, then you have an interesting company in terms of the value that it can create. Otherwise, it just turns into a volume game, and you or your company are eating just a piece of the pie.
Very insightful. Thank you Matt.