Yes, the Digital Mortgage Is an "Experience"
By: Daniel Sogorka
December 23, 2019
By:Daniel Sogorka
December 23, 2019

Yes, the Digital Mortgage Is an “Experience”

In October, we were lucky enough to have news of our partnership with Supreme Lending covered in Rob Chrisman’s daily newsletter, a fantastic go-to resource for many in the mortgage lending space.

But Chrisman called out our word choice in the headline, which read “Supreme Lending partnered with Cloudvirga to digitize the ‘Mortgage Experience.’” Chrisman added an editor’s note asking when a “process” became an “experience,” implying that our word choice was little more than an effort to fancy up the typically mundane mortgage production apparatus.

But the reality is that applying for a mortgage these days is an experience. I’m glad Chrisman made his comment, because it gives me an excuse to lay out exactly how much mortgage borrowing has changed in the last few years – and therefore how much mortgage lenders need to adapt to stay relevant.

The “Amazon Effect” on Mortgage Lending

A decade ago, the prevailing wisdom was that the “Amazon Effect” would be contained largely to the retail sector: when people could buy more easily online, they’d choose the internet over brick-and-mortar stores, and those stores would be forced to close.

While Amazon has been hard on brick-and-mortar retailers, it has also affected nearly every other sector of our economy. By one definition, the Amazon Effect means that customers now expect near-instant service, even in financial transactions.

In fact, as many as 81 percent of customers now expect faster response times than they did pre-Amazon – from any company they’re working with. What’s more, 53 percent of mobile website visitors will leave a website that takes longer than three seconds to load. 

What Amazon has done is raise consumer expectations about what a good experience looks like. Now, any organization that hopes to attract and retain customers must focus on offering an experience that competes with Amazon (and Netflix and Apple) for simplicity, convenience, and satisfaction.

Financial organizations have taken note: in 2018, 74 percent of banks considered customer experience a top priority.

The Importance of Human Engagement

The key to getting customer experience right in the age of Amazon is about more than just speed and convenience. In the mortgage lending industry, providing a top-tier experience also means facilitating the human interactions consumers crave.

A recent study by real estate valuation firm Solidifi found that 81 percent of customers actually want to close mortgage loans in person. The same study showed that 70 percent want a more digital process at the closing table. These two stats are not at odds – they clearly show that the BEST experience provides digital convenience at your fingertips when you want it, coupled with exceptional execution by human experts to ensure that the “transaction” is closed effectively when you need it.

This isn’t a standalone finding: Ellie Mae’s 2019 Borrower Insights Survey found that millennial homebuyers in particular like working with a human lender representative, face to face. Of that generation, 79 percent met in person “frequently” with their lender, compared with just 61 percent of baby boomers.

The message is clear: thanks to digital leaders like Amazon, today’s consumers expect greater digitization in every aspect of their lives; however, human nature hasn’t changed. When we’re engaging with complex financial transactions – especially those that may be unfamiliar to us – we want the reassurance of a trusted human to answer our questions and walk us through the process.

Creating a Digital Mortgage Experience that Meets Consumer Expectations

Today’s consumers, conditioned by Amazon, Apple, and Netflix, expect interactions with brands to be elegant and easy. Further, today’s mortgage consumers are not actually interested in mortgages – they want homes. 

Mortgage lenders who understand these two key points quickly realize that to remain successful, mortgage lending must offer consumers a seamless, enjoyable experience from application to home shopping to closing and moving in. Lenders need to make it easy for clients to get in their homes with minimal stress and maximum satisfaction. 

Part of what makes that possible is digitizing the ENTIRE mortgage process with software like Cloudvirga, as Supreme Lending did in October. The other part is ensuring that the people who make mortgage lending happen have the support they need to answer customer questions, solve customer problems, and generally provide customers with the kind of experience that lets them focus on the home of their dreams rather than the process of buying it. 

That’s how today’s leading brands – Amazon, Uber, Netflix, Apple – transformed their industries. By turning everyday activities into experiences that people actually enjoy, they reset our expectations so that we don’t have to even think about process. All we have to do is trust that we’ll get to where we want to be.

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