Over the next several weeks, our financial services team will be sharing observations on the current state of the mortgage industry, as well as trends we see gaining traction in future months and years. We’re calling this series Mortgage Matters, and it will feature insight on technology road-mapping, reducing loan origination costs, improving customer satisfaction, navigating the fluctuating regulatory environment, and retaining top talent.
State of the Mortgage Industry: Customer Experience in the Age of Amazon, Netflix
Among the many new paradigms established by Amazon and Netflix, perhaps the most disruptive are the shifts in customer behavior and expectations they have inspired.
We are now quite accustomed to having what we want, the way we want it, almost instantly. It is no wonder that mortgage companies, historically not seen as leaders in this space, are seeing customer satisfaction scores flatten or decrease.
Connecting with customers
There are several viable paths to enhancing the customer experience. For example, firms should work to ensure that the point of sale (POS) between a consumer and a lender is as frictionless as possible. This means making the interface as easy to use and understand as possible. Firms often assume this can be accomplished with an attractive, modern website. However, the real solution lies in leveraging user-based research to develop a website that is customized to the way consumers interact with technology.
Dylan Field, a writer at TechCrunch, surveyed six of the top technology companies and found that investment in user-experience (UX) has skyrocketed. In his words, this has become a new arms race.
A design executive from IBM also noted the importance of user-experience, saying that all companies should treat the user as their guide. While this focus on consumer experience is nothing new to the FAANGs of the world, it might be a revelation to the mortgage industry.
Being smart with data
How else can a mortgage company maximize the customer experience? By doing more with their data. Each interaction with a consumer produces data, and that data (when used intelligently) is more valuable than any currency.
By capturing, analyzing, and manipulating data, mortgage companies can make smarter decisions based on real, concrete information. For instance, by analyzing consumer behavior at the point-of-sale, that interface can be optimized to ensure consumers reach the desired outcome (e.g., fill out an application, request information, etc.). Even better, each customer interaction creates a constant feedback loop that allows for continuous improvement in the user experience.
For the new, early adopter
For those mortgage companies interested in really pushing the envelope on customer experience, the innovations around customer journey offer new terrain for growth. The idea involves vertically integrating the customer experience from home search (traditionally a realtor realm), through ongoing servicing and even home improvement. This type of consumer convergence is being adopted by several well-known lenders who are embracing fintech capabilities – as well as newcomers like Zillow Group, Redfin, and loanDepot.
Because data is the leading indicator and catalyst, there is talk of potential threats from Amazon and Google entering the home purchase and mortgage space. This remains to be seen. Whether they enter the space or not, mortgage firms would be well-served by taking a page from their customer experience playbook.
The path forward
How can mortgage companies determine which tech options will align with their business goals? Saxony Partners has years of expertise guiding mortgage teams down the right path when they hit barriers like this. As the only management and digital consulting firm that combines deep experience in the mortgage industry, Saxony Partners has equal experience in data management technologies.
The Financial Services team works with mortgage companies and services large and small, advising them on how to navigate rising interest rates, decreasing loan volumes, evolving regulations, and the never-ending need to differentiate from competitors.
Our goal is to help our clients do more with their data by turning it into a competitive advantage. Nowhere is this need more acute than in the mortgage industry, where data utilization will be the most pivotal factor in determining a firm’s future viability.
- Emerging technology and data strategy for mortgage firms
- Loan Origination Costs
- Customer Experience in the Age of Amazon, Netflix
- The Regulatory Change Environment
- Talent acquisition and attrition