What is Digital in Mortgage?
Digital or Digitalization is an umbrella term for the services using digital technologies, mainly on the Internet, but also including mobile phones, display advertising, and any other digital medium.
This is going to be a series of posts on digital mortgage, in the attempt to discuss and give a clear picture of what is the digitalization which has been occurring in the mortgage sector.
Now, in today’s world, industries such as food, groceries, shopping, etc. have transformed their conventional approach to business and imbibed digital. Let us take the example of Dominos, KFC, Amazon or BestBuy.
What are the benefits digital has delivered to the customers?
- Bypass Queue
- Comparable pricing (most of the online shopping sites gives good discounts)
- Easy returns
- Order Tracking
So, now the question comes to, why not digitalize the mortgage process lifecycle too?
It has traditionally been a time consuming and tedious process, which can sure use technology to ease out things a bit! And moreover, why would a customer wait patiently for a month or more to learn whether they will be able to obtain the financial help, for perhaps the most significant purchase of their lives?
Why does this process need to be so complex and opaque? Shouldn’t borrowers be given the same level of ease, empowerment, and transparency they enjoy in their more trivial purchases?
A large part of the process followed is as mandated by the governing bodies. The documents to be reviewed and the complexity of the decision making process, coupled with the thin profit margins sort of impedes the push for a better customer experience.
The mortgage industry is still a people-intensive business, and its people – specifically sales and fulfillment employees – are less and less productive. Today, thanks to uncompromising regulations after the financial crisis and risk-averse investors, the focus is on effective sales and better customer experience. Digital mortgage greatly helps improve productivity and manage operational risk.
Here is how we created a simple, scalable mortgage solution was needed to process the loans in a secure manner without losing control, yet offering borrowers great service.
Let’s discuss more on “What is digital Mortgage?”
The journey of a customer from application to acquiring the mortgage without office visits or spending hours on the phone with a loan officer. That would be the essence of a flawless digital mortgage experience.
An application can be filed online, documents and electronic signatures are submitted and all these documents will be executed electronically, making this process paperless.
I would describe that as the capability to provide a mortgage experience for a borrower from application all the way to funding without human intervention on the lender’s side,” said John Harrell, vice president of mortgage product management at USAA Bank. “I don’t know if that will ever be widespread, but if that’s the goal then we’ll end up having a ton of automation where the consumer is basically self-serving.
What value does digital mortgage bring?
- Reduces the instances of human error
- Free up loan officer time for more useful tasks
- Easy management of documents especially with cloud backups
- Adhere to processes so that things move as expected
Why should you be on the path to digital?
Well, customers are not going to wait for a lender who cannot be customer savvy when they have so many others who work in the digital times! And this has been proven in the past decade with the internet banking era.
Banking services in the past decade have seen a superb transformation, where user experience has been the key. Customers were not keen to stay on with banks which lacked simplicity in processes.
Similarly, every borrower has the option of choosing a better lender based on a superior user experience, which makes every transaction all the more crucial. If a mortgage provider can clearly explain product options and loan terms online, this would remove the need for human interaction, and in turn reduce the time taken to process loans. These processes help to deliver stellar customer experience and in creating the much needed differentiator in this large market.
Would you like to overcome the pain points of each mortgage transaction?
A techie experienced in various solutions, a big foodie and traveler. 1 of top 800 reviewers for the Bangalore food scene.All stories by: Pradyot Ranjan