The finance industry has experienced significant channel turbulence in the past decade, from market highs to the financial crisis, and the main concern among industry names today is addressing regulatory pressure, and dealing with a changing geopolitical climate while ensuring the forward trajectory of their company. While regulation has caused a lot of changes in process for financial institutions and companies, it also helped create a new financial era where technology reigns. New entrants are popping up across the sector to drive improvement in the customer experience, taking a hard line against incumbent powers.
This happened at such a rapid pace that the term ‘fintech’ was born and assigned to a new generation of tech-driven finance operations.
While the innovation of technology in finance has delivered noteworthy advancement, it also put companies into a position of constantly maintaining that they’re in lockstep with the latest technology. As a result, a new burden emerges for the customer-focused company—a technology pressure.
Technology pressure is best described as the importance customers place on fintech enterprises for mobility, transparency, and real-time results. Customers demand that we operate and interact with them in a way that makes life less complicated from a digital standpoint, and the lending industry offers a great deal of complexity that can be de-mystified and streamlined for easier consumption and greater understanding. But we’re not just facing this demand from a younger generation of tech-hungry customers. Our challenge is unquestionably multi-generational.
"Data helps identify the customer. Understanding and using that data to provide insights into the customer’s needs will help create processes where the customer experience is transformed into getting information, filling applications, or reaching decisions"
In fact, according to an article in the October 2017 Scotsman Guide Residential Edition, “Although many have made the assumption that millennials are driving the push toward a tech-savvy origination process, statistics show the interest in digital is widespread.”
The key to combating technology pressure is lifting the barriers that burden the loan process for potential borrowers. In fact, a J.D. Powers’ 2016 mortgage origination satisfaction survey noted that “Technology is becoming increasingly important, with 28 percent of customers indicating they completed their detailed application online, up from 22 percent in 2015 and 18 percent in 2014.”
As a CTO within the lending industry, there are two things that are the central focus of mine and my team’s time—customer experience and speed. As a result, there are different tactics that we have gone through to ensure we also are handling the technology pressure within the industry.
We focus our time on incremental changes that can make big differences like compressing the “cycle time”—the amount of time from application to funding of the loan. In order to ensure that these incremental changes are making a difference, one way to alleviate the technology pressure is by getting to the core of what customers really want.
They expect mobility, transparency, and immediacy. We’ve watched technology evolve over time from paper to fax to online/mobile, which has led to the delivery of the digital mortgage. The same process has been updated to accommodate customers and their need for new and more efficient procedures. The lending industry is at crossroads, and if it does not integrate technology into its business practices it may become obsolete.
To understand the customer experience, the lending industry continues to innovate and invest in systems and applications derived from predictive customer behavior based on data collection. Technology wasn’t invented to drive man out of a job, it is seen as a tool to make our jobs more efficient and free time to foster our relationships with customers.
Data helps identify the customer. Understanding and using that data to provide insights into the customer’s needs will help create processes where the customer experience is transformed into getting information, filling applications, or reaching decisions. This entire process could potentially be reduced from weeks to hours.
The online lending industry continues to evolve. What is most exciting is using information within one’s company to predict customer need states and provide them with the best information and tools available. Companies can anticipate those needs using innovative technology to alleviate themselves from the pressures of regulation and market uncertainty, and opening them up to greater business opportunities.