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The future of lending, or – why the mortgage market needs a facelift

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Digital mortgages are on the rise, but lenders are still lacking behind

Buying a home is one of the most emotional milestones you can aim for in your life. You’re not only acquiring space to live, but you also build the foundation for your future. You build the base for your beloved ones – your children and maybe even for the generation after.

Despite the fact that there are so many positive things about owning your own property, the way to go there is a hard and – in many cases – a stressful one. Choosing the right area to live, finding the perfect property and making sure the colors of the bedroom wall match your personal feng shui (you know what I mean ????). There are a lot of decisions to make and factors to think about. All those little things add up to a bulky weight to carry on your shoulders, and then you still have to think about how you are going to be able to finance everything.

In case you have recently applied for a mortgage, you probably experienced a service, which is not very different than it was 20 years ago. Despite rapid technological change, the process of closing a loan is still quite the same as how the generation before us experienced it: An overwhelming amount of paperwork combined with inefficient communication flows with your bank. They make it a burden to go from the initial contact with your lender to the actual release of funds to buy your property.

Customers expect an Uber-like experiences when applying for a credit

“I can process an order from my favorite Italian restaurant with my Iphone, can follow the delivery route of my €10 pizza in real time and can pay the restaurant without even touching my physical wallet. But when I want to buy a €600k property, I have to take a day off just to bring documents like my ID to my bank. And when it comes to negotiations about the pricing, it delays the processes even more. Some things are not very aligned here”

Summarizes Peter, a 33-year old marketing manager who recently bought a house and partly financed it via a mortgage from his bank




This comparison of this dissatisfied customer shows quite clearly, where the expectations of the generations Y & Z lie and how traditional approaches do not work for them anymore. Pieter-Jan, his friends and the generations to come are used to organize their whole life via a smartphone and encounter disappointing experiences when making such important steps for their personal lives.

This is also backed by latest research, as a study conducted by the Boston Consulting Group shows that 80% of recent home buyers would have liked to use a digital tool to close their mortgage.

As the digital mortgage market grows exponentially while the traditional mortgage market grows slightly, it is just a matter of time until challenger banks will enter and disrupt the market, as seen with online banking (N26, Revolut, etc.) before.

For a traditional bank, it’s therefore enormously important to re-think their existing mortgage offerings and processes in order to make the necessary changes today, so that tomorrow’s customer will not get disappointed.

How Oper supports banks to create world-class credit experiences


Oper was founded for a reason. Our vision is to enable any mortgage offering to become available in a digital way. We provide our clients with top-of-breed financial technology and integrate it seamlessly to their existing IT landscape. We believe, that a bank should do what a bank is best in – fostering customer relationships. Oper takes care of the rest, so lenders can focus on their clients.

If you want to find out how Oper can add value to your organization, don’t hesitate to contact us for a demo call.

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Oliver Allmoslechner

Oliver Allmoslechner

Vacancies

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