Digital transformation in the mortgage industry – 4 steps to getting it right

Share on linkedin
Share on facebook
Share on twitter
Estimated reading time : 3 Minutes

Share this post

The need to meet evolving customer expectations is driving digital transformation in the mortgage industry. McKinsey research indicates that about 60 percent of both purchase and refinance borrowers would be open to the idea of completing their entire mortgage application online, without a call or in-person support.

Also, customers want speed: satisfaction drops by around 15 percentage points if the lender takes more than 10 days to provide a decision on the application. Despite increasing expectations, customer experience continues to be subpar in mortgage, especially compared with say fintech companies.

With a greater number of millennials entering the mortgage market — who demand transparent digital engagement — the need to transform to a digital mortgage solution has become imperative. But in the absence of a mortgage digital transformation playbook, how can you get it right?

Successful transformation to digital mortgage solution requires a holistic approach

To be successful, digital transformation must go beyond short-term approaches such as upgrading legacy infrastructures or deploying re-platforming initiatives and align with long-term business objectives. It must be underpinned by a full-on digital strategy that combines cost effective delivery models with domain expertise, process optimization, innovative technology, and intelligent analytics. Digital transformation in mortgage can be visualized as a four-step journey.

Four Steps for Digital Transformation in Mortgage Industry

1. Optimize processes through reengineering

According to a study, overall customer satisfaction rates decline due to longer time lags between initial application and final closing. Reengineering processes using workflow technologies, deploying specialized applications and ensuring mature process documentation can enhance efficiency and quality. But make sure to focus on each function in the process, while also paying attention to the entire process as a whole. The better the process, the quicker loans can be originated and closed, the more satisfied your customer will be.

2. Reduce costs using global operations centers

Controlling skyrocketing fulfilment costs while mitigating risk, maintaining loan quality and providing responsive customer service is a major challenge confronting mortgage companies. Global operations centers offer a “right-shore” delivery approach, enabling lenders to take advantage of the right mix of locations and labor.

The ability to tap into skilled industry staffing and round the clock operations leads to several desired outcomes, like cost reductions and streamlined processes. Lenders can gain holistic support from outsourced loan processors and can maximize the scalability and flexibility of mortgage operations.

3. Drive standardization and efficiency through digitization

The mortgage industry operates in a highly regulated environment. Continued reliance on complex legacy systems, multiple databases and manual processes not only creates inefficiencies but also takes employee focus away from process improvement and customer experience.

Robotic Process Automation in mortgage consists of configurations or predefined directives that trigger rule-based actions without human intervention, based on the data received. Partial or full workflow automation of simple, repetitive tasks using mortgage process automation solutions, Intelligent OCR and Artificial Intelligence, offers significant opportunity to drive value and efficiency.

4. Create competitive advantage using advanced analytics

Data analytics opens new doors for competitive differentiation. Actionable insights from customer interactions derived through speech, text and customer sentiment analysis ensure a better understanding of customer needs and preferences. This lets lenders offer tailored customer experiences.

Then there is end-to-end customer journey mapping that helps identify process gaps to holistically improve customer experience as well as operational performance. Analytics also play a crucial role in driving automated compliance monitoring and exceptional associate performance. Lending organizations need to keep up to the pace by integrating data analytics into their digital mortgage process.

Digital mortgage solutions are a win-win for both consumers and lenders

Millennials and Gen Z borrowers who use digital channels for almost everything expect an effective, fast process for loans. However, it’s not only younger borrowers who want a digital-first approach. Borrowers at all stages of homeownership are looking for omnichannel experiences with full visibility into the process. With digital loan experience , lenders can offer their borrowers the ‘Amazon’ like experiences they expect.

The four-step journey shows digital mortgage processes are not as simple as checking a box or deploying a one-time solution. It is a rigorous practice designed to overhaul the home-buying experience that requires business alignment, organizational buy-in and change management to ensure success.

The important thing to remember is the benefits – for both consumers and lenders – far outweigh the pain involved in transforming a traditional mortgage model to a digitized one. From personalizing customer experience and jump-starting innovation to enhancing compliance and lowering costs, digital mortgage solutions help lenders stay relevant and competitive.

Featured Resource

Download our whitepaper, An HFS POV – From outsourcing to innovation: partnering to revolutionize mortgage servicing that analyzes how outsourcing can be a gateway to innovation and adoption of emerging technologies in the mortgage servicing business.

This form will put you in touch with our business development team. For all other functions, please click here.
Ready to get in touch and grow your business?
Tell us a little more so we can connect you with the right person
Last step! Let us know which solutions you're most interested in
How can we help?
Connect with us

Download Now

Simply fill out this form to download

Marketing Permission