Just a few years ago, an end-to-end digital mortgage platform was a glimpse of the future. Today, digital lending experiences are quickly becoming the norm (and the norm for consumer expectations). Lenders who want to stay competitive need to act quickly to find a reliable and scalable solution that will meet their — and their customer's — needs. Here’s 5 reasons why you can’t afford to wait.
1) Your competitors are already doing it.
It’s not just plans and posturing. J.D. Power found that in 2017, 43% of mortgage applications were submitted online – up from only 28% in 2016. That’s big portion of the market who are already finding a mortgage provider with a digital offering. If you don’t have a digital mortgage option available for potential applicants, they can easily find another lender who does. Which brings us to…
2) It’s what consumers want.
There’s no reason to expect the online application trend to reverse. Millennials are finally entering the housing market, and they’re accustomed using the Internet for everything from researching what they want to making the transaction happen. And it’s not just younger people – in a 2017 survey, 42% of Gen Xers and 32% of baby boomers also found their lender online.
In a survey, Oliver Wyman found that 71% of mortgage applicants only applied with one lender. Don’t give them a reason for that lender to not be you.
3) You need the cost savings.
The cost of originating loans just keeps going up. The latest numbers from the MBA place the average cost of origination at $8060 in Q3 2017, up from $6969 just a year earlier. What’s more, the MBA also projects overall origination volume to drop 6% in 2018, particularly as rising interest rates make refinancing less attractive.
A smaller overall market, combined with upward origination costs, means profits will keep getting squeezed. The cost savings enabled by more efficient digital lending processes can help you maintain your margins in a tough space.
4) The market’s moving fast.
After years of lagging behind other financial sectors in tech adoption, the evolution of the digital lending space has kicked into high gear. Two years ago, having a good “digital experience” meant that you offered your clients a nice-looking online application. Now, the nice application is table stakes, and innovation has moved on to streamlining the backend process and bringing together more of the various players involved in a mortgage transaction.
A digital lending solution is a big investment, both in resources and in time, and it’s natural to want to wait a bit until things slow down and it’s clearer which solutions will be on top. But in practice, waiting to see where the dust settles means that when you finally deploy, you’ll already be behind the curve, and the early adopters will have moved the goalposts (and consumers’ expectations) on to the next big thing.
This is also an excellent argument for adopting a SaaS platform like Roostify rather than building a solution in-house, but that’s a different blog post.
5) You can bring your own workflow.
One of the biggest challenges in deploying new tech, and a leading cause of delays, is needing to rework the rest of your system to accommodate the new solution (not to mention retraining all your employees). For digital lending, this is no longer a reason to wait.
Modern, API-based lending solutions can adapt to your workflow, rather than forcing you to switch to theirs. You can keep working with the same business logic and tech stack that works for you – only better.
Don’t wait – there’s no time like the present to start your digital lending journey.
Ready to get started? Schedule a demo today!