October 9, 2018

Looking Beyond Digitization

Written by Debbie Shatz

As digitization of the mortgage process (finally) gains steam, lenders need to start looking towards the future when everyone is digital. What will it mean for the industry?

An aspect of the digital process that is often overlooked is that an increase in digitization is equal to a decrease in interpersonal connectivity. Insofar as that interpersonal connectivity is what binds a borrower to a loan office or lender, what will provide that binding compound in the future?  How will you make your brand stand out?  What will make a borrower come to you versus the next lender in their google search?

Quicken took a very forward thinking, positive step when they introduced Rocket Mortgage to a huge audience via their super bowl ads.  Many people now equate a digital or online experience with “Rocket Mortgage”, similar to how a copier is called a Xerox machine or a tissue a Kleenex.  Only time will tell if that sticks, but it is definitely a presence in the market today that everyone has felt.

The commoditization and loss of a personal interchange is not new.   People used to visit a specific gas station because they trusted a brand or liked “Jimmy” and thought he was a nice guy that always did such a great job cleaning your windows (remember when that happened!?!).  Consumers developed a personal relationship that drove what gas station they visited most frequently.  Today, almost all gas stations require little to no interaction with a person, with their credit card machines at the self-serve pumps (except in states like NJ, but that’s another story). People most often simply buy based on price and convenience.  If you asked people what brand gas they bought most recently, many would not know the answer.  Today, the competitive landscape for gas stations is therefore very much price based.  The competition is made more intense with the sharing of data via apps like GasBuddy, so people can easily compare prices in their area and pick their vendor for the next fill-up.

With digitization and the increasing popularity and use of Day 1 Certainty and Loan Advisor Suite functionality accelerating the process, getting a mortgage from Lender A or Lender B will not differ much at all for most borrowers.  They will select based on price and convenience.  Depending on the results of their google search, it may end up being more of the latter than the former. Standing out amidst commoditization will then be critical to survival.  How will you be found by a potential borrower?  Why should they apply with you versus another lender?

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