Using Customer Experience to Increase Mortgage Origination Profits

By Staff Writer on September 12, 2016
Channelnet article image-automation-mortgage origination

The Scotsman Guide, a leading publication for mortgage originators, invited our CEO and founder, Paula Tompkins to share her thoughts on the digital transformation of mortgage lenders. The September 2016 article, The Digital Finish Line Is Behind Us, compares and contrasts the auto-finance industry with the mortgage industry. Photo illustration is from the Scotsman Guide. Below is an article excerpt.

The Digital Finish Line Is Behind Us

The mortgage industry is finally making some positive strides toward bringing the loan-origination process more fully into the digital age. The J.D. Power 2015 U.S. Primary Mortgage Origination Satisfaction Study reports higher satisfaction among customers who use digital channels for activities related to mortgage applications, such as completing applications and submitting documents.

The bad news, however, is that even though the 2016 World Retail Banking report also concludes that the mortgage-customer experience is improving as originators make baby steps toward improving digital connectivity with customers and sales channels, the report also says these improvements are not increasing profitability.

All the statistics say that if you improve the customer experience, you will increase revenue. So why isn’t the needle moving for mortgage loan originators? The industry is simply not going far enough or fast enough to digitize the entire customer experience. Mortgage companies need a more comprehensive approach that connects loan originators with consumers — from the loan application to the closing. Originators still rely on phone calls, U.S. and overnight mail, and paper processes to get their clients to the closing.

Increasing closing rates is something the auto-finance industry learned to do long ago. There are a number of parallels between mortgage lenders and the automotive industry:

  • Having distributed sales channels, with the mortgage industry relying on loan originators and brokers while automotive companies rely on finance companies and dealership staff;
  • Selling big-ticket items that require extensive paperwork consumers must wade through to complete their purchase;
  • Transforming from a product-focused sales process to a customer-centric one;
  • Adhering to federal and state regulations and rules; and
  • Serving challenging consumers who are busy, time-starved and looking for convenience, expedience and relevancy.

Despite facing a similarly fractured sales process that makes secure integration a big challenge — especially when dealing with third-party systems — auto financers have been early adopters of digital channels. They understand their customers expect to use the web to conduct business and also expect an easy-to-use, fast experience that provides a “let me do it myself” option.

In contrast to mortgage companies, auto financers have taken the route of customer-centric technology solutions that integrate with existing systems, third-party applications and customer data.

To view the rest of Tompkins’ article and recommendations for mortgage originators read the article at Scotsmanguide.com


Leave a Reply