New technology has to offer some improvement over existing technology—otherwise, there’d be no reason for adoption. Push the improvements too far, however, and it can have a negative effect on adoption rates.
In the mortgage space, this can happen as new technology becomes available to brokers, who often aren’t given a lot of time or training to go along with new programs, systems and apps.
“Just don’t go too far too fast. Even though the tech is available, keep it in step with where people are willing to go,” said Geoff Willis, president and CEO of Newton Connectivity Systems. “People sometimes let the tech drive it and it’s just too far ahead of the culture.”
Willis, has seen it happen in the U.S., where mortgage industry players have invested heavily in technology but haven’t seen the expected business returns from that investment. The reason, he said, is because originators aren’t always willing to introduce that technology.
Put it in the hands of the consumer, however, and everything changes. FinTech companies and lenders alike are now trying to reach the consumer first, and making it clear that certain technology is a part of a broker’s offering.
“They’re all trying to figure out ways to put technology in front of customers that isn’t dependent on the loan officer to be the one introducing it, which is something we see all the time here,” Willis said. “You’ve got to keep in step with your distribution channel, because if you’re too far ahead of them and they’re not comfortable or it seems a lot harder for them to learn, then they don’t want to look silly to a customer, so they just don’t let them know it’s available.”
Many Canadian lenders operate on legacy systems, and while brokers have found ways to work around them and use individual tools, those tools don’t always work together in an efficient matter. That, along with other factors, such as regulatory restrictions that are intended to keep the financial sector on steady ground have an impact on competitiveness among FinTech companies. And even though banks are investing in technology, they’re doing so far less than other companies.
“It’s easier to have POS systems connect to outsourced LOS systems than it is to connect to outdated legacy systems that we have to deal with. Our problem is that often, the people that we have to interact with, the people that have access to the capital, tend to be on very old technology. That has slowed us down,” Willis said.
But, as in the States, Canada has found the consumer to be a crucial partner in the push to advance the available technology in the mortgage space. Once the consumers accept and adopt technological advances in one area of their lives, they’re quick to expect—sometimes even demand—it in others.
Earlier this year, M3 Group developed their own prequalification tool, and as they built and revised their own technology and developed ways to hook the consumer, they learned that the industry no longer had to get behind the consumer.
“The iteration you see now is multiple iterations downstream from all of our learning,” said Dino DiPancrazio, EVP of strategy and innovation at M3. “What it told us is that the consumer was ready. The consumer was ready to complete a part of that journey digitally.”
Willis said that introducing technology to the consumer first is hastening the industry’s movement in the tech space, and consumers are now the ones pushing the industry forward instead of being pulled along. Consumers want more digital tools available, but they don’t solely want digital tools. Instead, they want a “humanized digital experience, where the broker complements the technology, and the technology complements the broker,” said André Boisvert, chief technology officer at M3. “Consumers expect that, and a younger generation expects that more and more and more.”
Their expectations around instant gratification and answers on demand requires intelligent and integrated systems behind the scenes. This behind-the scenes work can do more than satisfy the consumers (and in turn the brokers who serve them). The more intelligent systems become, the more data they can use to identify patterns and characteristics of deals, and habits of consumers.
Like everywhere else, big data is going to play a big role in the future of the mortgage industry.
“The broker is more concerned about the customer profile information . . . what’s really more important from a big data perspective—in order to better serve the brokers in return—is the patterns,” Boisvert said. “Once you accumulate the big data around this, then you can derive patterns, and from patterns you can derive strategies to use that data.”
Part of it is objective data such as penalties and interest rates, and the other part of it concerns human nature. The two areas that are ripe for innovation are systems that can improve the timing of the process, i.e., when is best to get in touch with consumers and what methods of outreach and timing of that outreach result in the highest conversion rates. Another easy target is document collection, which is very time-consuming, and not the highest and best use of a broker’s bandwidth. Consumers are concerned about security and are demanding secured client portals, as well as automated ways to access their documents.
The opportunities are endless, and brokers willing to be a champion for consumer access to digital tools has the most to gain.
What are your top tech tools and expectations for the coming year? Let us know at [email protected].