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Towards the fully digital mortgage

Towards the fully digital mortgage

ING DIRECT is urging financial institutions to hasten the move to a fully digital mortgage. Why? Because customers want do things quickly anytime, anywhere and on any device

Two thirds of millennials would rather visit the dentist than go through the mortgage process, according to recent research by ING. It’s a startling revelation, and indication indeed that the home loan application experience leaves a lot to be desired.

It's the laborious nature of the process that leaves prospective home buyers so disillusioned and exhausted

If we drill down into what's driving that sentiment, it’s the laborious nature of the process that leaves prospective home buyers so disillusioned and exhausted. There are the wads of paper documents to wade through, the myriad steps integral to the application and the beleaguered way in which prospective home buyers find out whether their application is declined, only once they get mid-way through the process.

In short, the cumbersome nature of the application procedure is at odds with the way consumers operate in other areas of their lives.

Customers are more digitally engaged than ever

From shopping to banking to watching a movie, customers are more digitally engaged than ever and they’re used to the ease and rapid delivery that digital technology provides.

In an era when consumers have less time on their hands, they relish being able to do things quickly anytime, anywhere and on any device.  It’s a reality that has driven innovation and customer advocacy in other industries – think Netflix, Airbnb, Uber and so forth – and it’s no surprise that customers expect the mortgage industry to follow suit.

Overcoming the friction

Regulation is often highlighted as a barrier to innovation in mortgage issuance, particularly the way in which wet signatures are not permitted and the process is hindered by paper bound steps. Ideally the mortgage process of the future will consist of end to end digital touchpoints, right from lead generation to settlement and beyond; perhaps even using the digital mortgage as a platform to leverage as the customer moves through their financial lifecycle.

Orchestrate the transfer of funds digitally for exchange and settlement

But while the industry continues to support and lobby for regulatory change, there is currently lots of opportunity to make progress within the industry, and ultimately improve the experience for the customer – collaborate to introduce comprehensive credit reporting (unless you have a solid industry cohort involved, we will be left with a fragmented system); optimise digital tools and calculators;  choose digital ID checks rather than face to face; and orchestrate the transfer of funds digitally for exchange and settlement.

Saving the industry hundreds of millions of dollars in eliminating paper bound, time consuming processes

And there are clear benefits for both the customer and the organisation in exploring digital innovation. For example, in the six years since ING DIRECT lobbied and successfully introduced electronic identity verification within Australia, the digitisation of this process has saved the industry hundreds of millions of dollars in eliminating paper bound, time consuming processes to deliver an enhanced and risk robust experience for the customer.

We need to deliver solutions which fit the way in which customers want to transact – in spite of the regulatory environment.  Customers are expecting this; let’s start digitising together now

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