With companies like Amazon and Uber setting up the standards and the norms of user experience online, lenders and realtors of the mortgage industry are pressured to keep up with the pace and deliver the same ease and familiarity provided by these digital platforms.
But the question is: Is there such as thing as a fast pass?Get today’s mortgage rates!
Welcoming digital transformation
Many mortgage lenders are now jumping into the bandwagon and making the shift as fast as possible. But it’s not as easy as it may seem to the homebuyer.
To lenders industry-wide, that means importing decades-worth of records into digital, finding the tech to host the process, and wrapping it in a consumer and lender centric interface that will facilitate the process with ease.
According to research conducted by Accenture, 87 percent of the mortgage consumer market start their homebuying experience online. And the number could only increase.
Given most of these users are already familiar with the ease provided by many service-delivering platforms online, they’re going to expect the same from the real estate industry.
The problem is: not everyone is just ready. In fact, only very few have successfully integrated tech into their operations and those who did mostly came from the tech side rather than the mortgagors themselves.
Just recently, a silicon valley startup called Blend grabbed headlines after it successfully raised over $100,000 in its recent fund campaign to bridge the gap between tech and mortgage.
Bringing the lending process online benefits the lender in more ways than one. It gives lenders access to first and third party data that will make prospecting and cross selling easier. It will also reduce human errors and risks, while bringing down cost by 30 percent, per Accenture.
In the way
Of course, making this shift would introduce those who dare jump to the other side to some serious challenges.
One of which is coming up with the technology which remains expensive – perhaps too expensive for most lenders. They are also continually changing and there’s no evergreen platform so there is the constant need to adapt.
Another is the lack of human resource. Because although digital lending makes the lending process easier, there is still much of human factors involved in completing a mortgage transaction. Only that their rules and tasks have changed. And staff requires training, which is another cost. They need to learn new platforms and adapt as they come.
Networking also poses another difficulty. Lenders need to build and maintain connections such as credit repositories, escrow providers, realtor networks, and other third party entities, among others. After all, lending is a convergence of various small steps performed and/or participated by individuals not directly within their lending office.
The ultimate goal for many now is an end-to-end lending platform that will accommodate all the steps of the mortgage acquisition process from application to underwriting to closing.
And while Blend may have gotten ahead among many in that ambition, professional service providers and strategists such as Accenture are looking into their own end-to-end platforms that solve the issue at hand.
Accenture believes that the transition to digital requires “a new breed of as-a-Service” that offers the right people, the right process; compliance assurance; and technology focus to deliver what is demanded.
As the market pushes for new services and new solutions, lenders and the whole industry must remain relevant – and fast.
Is there such thing as a fast pass? We believe it’s doable. But only if the tech and mortgage industries take the time to sit down and start fitting need to solution.