What do borrowers really want?

Author:Dombrowski, Joe
Position:CONSUMER RESEARCH
 
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What's high on borrowers' wish lists today? Turns out it's a blend of things digital and personal, according to new research.

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Whether you started in the mortgage business with handwritten loan applications and collecting checks for payments or learned it using online applications and electronic funds exchange, the one constant is the customer's expectation that he or she can always contact an experienced mortgage professional for assistance. [paragraph] While borrowers rely on personal relationships with trusted friends and family for recommendations and support, they also heavily rely on relationships with lenders. [paragraph] In fact, according to Expectations & Experiences: Borrowing and Wealth Management, the Fiserv quarterly consumer trends survey conducted by Harris Poll, Rochester, New York, among 3,090 U.S. consumers, 65 percent of consumers who feel uncomfortable completing a loan online report they prefer the "personal touch" and working with financial services professionals as opposed to applying completely online (see Figure 1).

Seniors (age 70 and older) and late baby boomers (ages 62-69) are more likely than millennials (ages 18-35) to value the personal touch (76 percent and 68 percent, respectively, versus 55 percent).

Even with the tremendous technology advances to support a primarily self-service lending process, customers are still deliberate and thoughtful when it comes to major life-changing purchases such as automobiles, kitchen renovations and, above all, buying a home--all transactions that require borrowing substantial funds. For these big-ticket purchases, they still want help to guide and support them through an unfamiliar, daunting and sometimes stressful process.

Maybe customers have a question about being a first-time homebuyer, or the next step in their approval process, a suggestion on the best loan product for their needs, confirming their payment has been received or understanding their options when they have encountered difficulty paying their loan. The mortgage technology toolbox has changed considerably, but customer service will always be a competitive differentiator regardless of borrower demographics.

Providing customer service through any channel a borrower wants to use and meeting their evolving expectations for easy, intuitive, immediate and secure touchpoints during the life cycle of a loan is key to bridging the experience between how customers make other purchases or payments and what they expect with their home loan.

How do borrowers seek mortgage expertise?

With interest still strong in balancing human interaction with automation, how are borrowers deciding which lenders to apply with? The overarching consideration for which lender consumers will ultimately use is primarily money-related-- i.e., who has the best available interest rate (76 percent), and the fees they are charging (65 percent) (see Figure 2).

But prior experience with a lender is also a critical part of the decision-making process for experienced borrowers--61 percent of those who currently have a loan say they would be highly influenced by prior loan experience, including three-quarters of heavy borrowers (those with six or more loans) (75 percent).

Of course, first-time borrowers do not have the benefit of this experience. Of early millennials (categorized as those between the ages of 18 and 24), who theoretically are the least experienced group of borrowers, 47 percent who currently have loans rely on recommendations from family or friends.

With this in mind, participating in social media to gather and monitor customer opinions and otherwise actively soliciting customer sentiment to ask how they felt about their interaction can create a feedback loop for both internal improvement and reinforce that you value the relationships you have with customers.

Do borrowers view financing as just a monetary transaction or something more?

Mortgage lenders and servicers can differentiate themselves by focusing on the desire among consumers to foster trusted partnerships. According to Costa Mesa, California-based J.D. Power's Primary Mortgage Servicer Satisfaction Study[TM] released in July, those who invest strategically in the customer experience can not only recapture that investment, but can also increase profits along with customer satisfaction.

This study found that investing in improving the customer experience increased the likelihood of customers considering the lender for future mortgage needs, and that a positive customer experience can promote increased cross-selling to existing customers or lead...

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