Getting rid of mortgage molasses
Today’s vision for innovation needs to shift from cost reduction to customer value creation.
The future of mortgages holds tremendous promise. However, today’s industry vision for how to leverage emerging mortgage technology is far too fixated on cost reduction instead of creating of customer value. Instead of figuring out how to automate old processes, what if we focused on solving practical customer problems like being able to apply for and close a mortgage in a handful of days, rather than weeks or months? What if the concept of applying for credit was old news, because members are always approved? What if credit monitoring and optimization was part of that ongoing relationship?
Mortgages close, on average, six times slower than the regulatory environment requires. It’s time to modernize the 40-plus-day home loan process. Will the industry continue to duct tape efficiency-oriented point-of-sale technology on top of brick-and-mortar-oriented operations, or will we stop dragging our feet and pursue with determination more visionary ideas?
Fintech companies are all the rage; they’ve inspired a sense of hope for real innovation, despite the molasses-paced change we’ve seen in financial services compared to other industries. But prior to this external “giddy-up” from fintechs, financial institutions had not gone far down the path of imagining better business models, creating new customer value or even significantly speeding up lending processes.
continue reading »
