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Your guide to digitising the mortgage origination process in 7 steps

Innovation
Lenders
Productivity
Customers now have high expectations for seamless and digitized processes. Unfortunately, traditional paper-heavy mortgage origination falls short of today’s anticipations for efficiency and speed, creating bottlenecks that delay closings and frustrate borrowers.
By 
Natalia Slota
February 27, 2024
TABLE OF CONTENTS

Incorporating digital journeys significantly cuts processing times and operational costs by automating data verification, using electronic documents, and enabling digital signatures. This approach not only accelerates the mortgage application process but also introduces transparency, allowing borrowers to track their application's progress in real time.

But how can lenders do that effectively?

Step 1: Take a few steps back

Before diving into the digital transformation of your processes, try to define what a digital mortgage means for your organization. Can you identify what exactly needs to be improved? What are your client’s expectations and current feedback? Get your definitions right from the start. This will make adoption and direction across your organization much more accessible.

When we talk about a digital mortgage process, we envision it to be on par with how digital leaders engage with their clients. Think about the seamless car buying experience at Tesla, the convenience of ordering a cab through Uber, or the simplicity of opening a bank account with Revolut. Concerning mortgages, this means two primary objectives: reducing borrower anxiety and minimizing the reliance on paper and manual processes.

Step 2: Leverage data to define your current state

Look at your current mortgage process with the data lens. Try to answer questions such as:

  • How do borrowers reach you today?
  • What’s your channel mix?
  • What steps do they need to get an advisory conversation?
  • What’s your time-to-yes?
  • What’s your first time right?
  • What’s the average conversion rate?
  • Are they mainly existing clients or new clients?

By establishing a data-driven dashboard of clear metrics across a sales funnel, you can identify areas for improvement and potential impacts, providing a foundation for your digital strategy.

Step 3: Align your high-level strategy

Now that you have a list of immediate improvements, it's important to recognise that your strategy is dynamic and subject to internal and external factors. Consider the priorities of your organisation. Are you looking to focus on acquiring new clients or do you need to make significant enhancements to your existing mortgage portfolio to meet specific ESG criteria? Evaluate and prioritise improvement areas based on their alignment with your strategic objectives.

Step 4: Identify quick wins and longer-term blocks

Look across the value chain to identify initiatives that can quickly contribute to executing your mortgage strategy effectively. Distinguish between quick wins that can deliver immediate benefits and longer-term projects that require more significant investment and time.

Step 5: 3 rules to making innovation work: Experiment, experiment and experiment

Start testing your improvements by quickly launching experiments. For instance, if you aim to improve conversion rates in the online funnel, conduct an A/B test to determine which questions can drive better client filtering. Combine process improvements with quick technology prototypes and double down on the winners.

Step 6: Double down on winners, accelerate your pace by applying a best-of-breed technology approach

While some lenders try to develop these digital journeys internally, this approach may not always be the most efficient. Nowadays, many SaaS vendors have already solved the complexities of processes and technologies that you, as a lender, are still working on. They offer solutions at a fraction of the cost of developing them in-house.

For example, at Oper Credits we have developed white-label borrower and advisory tools that allow lenders to deliver an improved borrower experience, boost conversion rates, and increase efficiency. From activation to fulfilment, Oper automates the manual parts of the process via API infrastructure that connects crucial information to streamline the mortgage application process and eliminate paperwork.

Start compiling a list of vendors who can assist you in achieving rapid impact in your journey and adopt a best-of-breed strategy to accelerate your progress by leveraging these vendors.

Step 7: Foster a Culture of Continuous Improvement

In the digital world, stagnation is not an option. The digital mortgage process, like all digital services, must be subject to continuous improvement. Building on your foundational changes, ensure your strategy includes mechanisms for ongoing optimisation to keep pace with evolving client expectations and technological advancements.

To conclude, the journey towards digital mortgage origination is both a strategic necessity and a response to customer demands for seamless, efficient services. Transitioning from traditional processes to digital ones requires thoughtful planning, experimentation, and continuous improvement.

If this seems daunting, Oper is here to assist. Our advisors can help you leverage the digital tools available through the Oper platform, ensuring your digitisation process is successful and aligned with industry standards. By adopting our white-label solutions, you can enhance the borrower experience, streamline operations, and stay ahead of the competition. Book a demo with us today here.

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