It's no mystery that the mortgage industry is changing. From the everpresent threat of regulation changes and increasingly slim margins to competition from outside and, indeed, within the industry, brokers need to adapt to thrive.
Every industry player has predictions about how the industry will evolve. However, when that player has more than a quarter-century of experience in the financial services like Sharon Fitzpatrick does, it’s safe to assume her predictions are rooted in wisdom.
Over the course of her career in the mortgage and banking industries, Fitzpatrick, who currently serves as the executive vice president of corporate development for Paradigm Quest, has gained knowledge in sales leadership, credit, customer experience and risk assessment.
She’s also encountered enough challenges to be able to predict the obstacles that are coming down the road for brokers in the future. And as Fitzpatrick sees it, the main obstacle is going to be an increased pressure to do business online.
“The future is online and mobile,” she says. “We’ve seen incredible advancements in online and mobile technology in the financial services sector. There is technological innovation in every corner of our lives.”
The evolution of the industry toward all things digital should be no problem for younger brokers, those who can barely remember a time when the Internet didn’t exist and are fluent in social media and digital communication. However, a quick search through Twitter or Facebook reveals that brokers from all generations are starting to embrace the impact that mobile communications can have for business.
Fitzpatrick points out that there will be even more need for confidence in digital communications as the industry catches up to the big banks in terms of technology.
“The mortgage industry is playing a slow catch-up to some of the other sectors we’ve seen – in particular, retail banking, deposit and investments,” Fitzpatrick says. “I can’t wait for the day when a mortgage application can be digitally completed without the need for mountains of paperwork.”
While the mortgage industry’s technological infrastructure clearly still needs to grow, Fitzpatrick believes brokers would do well to put themselves ahead of the curve.
“There is a need for brokers to get up to speed with technology and to learn how to interact with consumers who rely mainly on online and mobile means,” she says. “The world is quickly changing, and mortgage brokers need to embrace this change in order to market to and relate to Canadian mortgage consumers.”
How lenders can help
However pressing the challenges of the future might be, there are other current – and very real – issues brokers are facing both on and offline these days. Fitzpatrick points to the ever more restrictive lending environment as a key example.
“Placing a deal today that you know is good, and would have been a no-brainer a few years ago, is a big challenge for brokers and lenders,” she says. “Clients don’t see themselves as ‘near prime,’ which typically means qualifying for a higher rate.”
However, she adds, there is opportunity here for brokers to differentiate themselves from the big banks by providing guidance to these types of clients.
“Educating clients on the changing regulatory environment and how to keep their credit profile healthy is the real opportunity for mortgage brokers to differentiate with advice,” she says.
For her part, Fitzpatrick wants brokers to be able to turn to their lending partners for solutions to meet this challenge headon. She’s calling for consistency in policies and processes, along with improved communication, from the channel’s leading monoline lenders. This is critical, she says.
“Mortgage brokers want to know that they can rely on your offering – there is a real opportunity, and I’d suggest an expectation, that monolines need to lead the industry with innovation. We don’t have competing IT resources that the banks do – we are singularly focused on the mortgage business and are viewed as the experts.”
Fitzpatrick is also calling on lender partners to put the client first, which, in turn, will help improve the services both brokers and lenders can offer to Canadian homebuyers. In her mind, this how the broker channel will pull up to – and perhaps surpass – Canada’s big banks when it comes to mortgage lending.
“We can and should be constantly elevating the client experience to a new level for both the broker and borrower,” Fitzpatrick says. “Sure, the banks will eventually follow, but it is the monolines who are 100% committed to serving this asset class and this market. It’s time for an investment to be made in our industry’s future.”