Applying for a mortgage is a grueling experience. Even though the industry is investing in better technology to improve the process, many borrowers still relate the experience to a financial colonoscopy. Financial institutions feel the growing demand for better user experiences as new borrowers prove they’re willing to go anywhere to get it—even if it means making one of the biggest purchases of their life through an unknown fintech company.
It’s not shocking news that digital natives have a digital presence so deeply entwined with their daily lives; they’ve grown accustomed to an on-demand lifestyle. Despite the common misconception that Millennials (loosely defined as individuals born between 1980-1996) aren’t buying homes, they’ve in fact surpassed Generation X (1965 to 1980) as having the largest share of loan originations by dollar volume.
Millennials overwhelmingly prefer online lending and have far higher expectations when it comes to customer experience than previous generations. Large banks have lost over 50% of their market share in the last 7 years, while online lenders have grown by 100%.
For Millennials, online lenders offer a quicker, more streamlined, easy-to-use experience. To gain digital natives as customers, mortgage lenders must deliver:
- Highly personal, premium customer attention
- Fast communication and processes
- Streamlined, trustworthy technology
- Easy-to-use interfaces and apps
Unfortunately, many lending institutions struggle with speed and processes and simply cannot keep up with their online counterparts. Most lenders are stuck relying on traditional, outdated methods of record-keeping, like manual spreadsheets, legacy databases, and complicated enterprise systems.
In this scenario, everyone loses— external customers are disappointed by a slower experience, while internal customers like loan processors and underwriters lose potential business.
So, how do mortgage institutions keep and retain customers while also improving the lending process for internal customers?
Here’s where low-code technology comes into play.
Many financial institutions realize that back-office improvements need to be prioritized to achieve a winning customer experience. Low-code technology gives anyone (no matter their technical skill level) the ability to easily build and integrate the exact business software they need to track, manage, and automate processes without having to change their legacy systems.
Some lenders call low-code their digital transformation secret weapon. It’s a way to quickly transform the back-office by building one centralized tool that connects all your existing systems and streamlines work, automates processes, triggers workflows, and offers real-time visibility. Plus, businesses don’t need IT to build it. With low-code, anyone can create the software they need by using a simple drag-and-drop interface.
For lending institutions, this means automating meticulous tasks that are subject to human error or sluggishness—like process-driven, data-intensive, and repetitive to-dos—that can drive loan processors and underwriters to frustration.
Impact on internal customers
For internal customers like mortgage brokers, improved back-office processes mean:
Faster loan processing
- Recommending a loan doesn’t take long; however, the processing time can be grueling— often between 10-15 hours. Low-code technology can reduce this time drastically, freeing up brokers to focus on other aspects of the business like sales, strategy, and customer communication.
- Low-code offers intuitive interfaces and dashboards, allowing brokers and loan processors to keep a keen eye on processes at all times.
Decreased operating costs
- By freeing up brokers and their team members to focus on more human-powered aspects of the mortgage process, low-code technology helps increase profit margins.
Greater data continuity
- An efficient back office is useless without accuracy. Thankfully, reliable low-code enables businesses to significantly decrease the chance for human error and help brokers maintain better business practices and excellence in the services they offer.
Impact on external customers
For external customers like individual borrowers, efficient back-office processes mean:
Faster loan approval
- The speed of the loan process (submission, approval, and settlement) is a crucial part of the customer experience. Low-code technology dramatically speeds up the process by decreasing manual paperwork and waiting periods.
Greater trust in financial institutions
- A frictionless loan approval process leads to improved data integrity and accessibility, thereby promoting peace of mind and trust in financial institutions.
Discover how leaders in the financial services arena are succeeding in driving digital transformation across their organization using low-code platforms. Download this free guide to learn how digitizing your back-office processes allows you to automate data collection, reduce errors, and digitize workflows to reduce operating expenses.