A recent Washington Post article highlighted George Mason University’s new program where Starship Technologies installed robots on the campus to deliver food to students. The article mentioned how successful the robots were in driving students to eat breakfast, a meal that is usually skipped 88% of the time by undergraduates. In my view, the most interesting part of the story was that the university was surprised how quickly the service was adopted by students.
One of the reasons for the program’s success was that students were already familiar with using phone apps to access food delivery services. Not only did the program improve the students’ breakfast consumption, but it increased the school’s profits on food sales. Everyone involved benefited. I think there is an important lesson here for mortgage bankers.
Last week, there were many stories from the MBA’s Tech conference centering on how technology is not delivering a positive return on investment for mortgage companies. Chart after chart showed how the cost to originate has skyrocketed since the Great Recession, causing the industry to become less profitable. One of the main discussion points was that the investment of millions of dollars for technological improvements has not produced a significant decrease in origination costs. As a result, many executives feel they have been sold a bill of goods by technology companies.
Another storyline from the conference was that newer technology was difficult to integrate with older legacy systems and how that has led to an epic failure to decrease closing time. All of these comments are certainly relevant based on my conversations with mortgage executives, but I think companies are focused on the wrong thing.
Too often, success of technological investments is only viewed in terms of reduction of a lender’s costs, and not in how it makes the loan process easier for the borrower. The real issue for the mortgage industry is how do we make the home-buying experience as convenient as George Mason University made eating breakfast for students? If a university was willing to think outside the box, couldn’t lenders do the same thing? Maybe it is time to broaden our justification for technology to encompass how it can create a more proactive customer experience by saving borrowers time and effort.
Rarely do I hear executives talk about what their firms are doing to make the loan process easier for their customers and prospects. In today’s world where there doesn’t seem to be enough time in each day to fit in work and life obligations, convenience and ease of use are important commodities.
Too many originators believe that consumers only care about price. And too many companies talk about their slim profit margins, something they say is beyond their control. In my conversations with originators and managers, I hear these types of comments on a near daily basis. If consumers were only concerned with price, everyone would be driving Kias which is obviously not the case. While price and profit margins are important business issues, so are delivering value and a great customer experience.
Industry leaders such as Apple and Amazon have built their businesses based on being easy to deal with, not necessarily by having a certain price point. What I find interesting is that Amazon and other firms not only make their selling process easy, but they anticipate what consumers may want by using data collection. It is clear that these companies are constantly evaluating and redefining what time and convenience means to their buyers.
In my opinion, our industry gets fixated on one issue. Right now, the hottest topic is reducing our average closing time to less than 45 days. While that is critical, I haven’t heard a lot of conversations about anything else.
I certainly don’t hear lenders talking about whether their originators are capable and knowledgeable when they interact with prospects and borrowers. It certainly seems that technology can speed the process, but it is our interactions with other human beings that drive the customer experience. While processing a home loan isn’t as simple as having breakfast delivered by a robot, it can be made easier than it is now. Companies must revise their thinking by asking “What does the customer value and how can we deliver it to them?”