In its annual What's Going on In Banking survey of community-based financial institutions, analyst firm Cornerstone Advisors found respondents expected increased competition over the next decade from:
· FinTechs like Credit Karma and PayPal (47%);
· Apple, Google and other Big Tech firms (35%);
· Megabanks (34%); and
· ChallengerBanks or Neobanks such as Chime or Varo (33%).
The main areas in which these institutions pose significant competitive threats are deposits and payments/credit cards. Conspicuously absent from the list are mortgage lenders — not particularly surprising given mortgage is not typically atop priority for community banks, with community banks accounting for only 13% of all mortgage volume in 2020.
But perhaps it should be. Though the mortgage industry is undergoing a digital transformation of its own, nearly 50% of first-time homebuyers report being uncomfortable with an online-only mortgage experience, leading them to seek out trusted expertise. Customer satisfaction scores are consistently higher when the borrower believes the lender was proactive in its communication and did not rely solely on automated technology throughout the process.
Our proprietary point-of-sale platform, Borrower Wallet, meets this need by providing community banks with a modern, digitally-enabled mortgage experience that empowers their customers, giving them control over how much —or little — support they get from their lending team during the process. The first-of-its-kind, fully integrated platform allows loan officers to co-pilot the application process and collaborate with customers directly in the platform.
Offering borrowers a digital mortgage experience rooted in local service and values provides community banks with a key differentiator from their larger, tech-savvy competition. Yet, for many community banks, the ability — or inability — to invest in tech is a barrier to capitalizing on this opportunity. In-house technology development can be cost- and time-prohibitive, and most out-of-the-box solutions cannot deliver a high-touch, service-first customer experience.
By providing all the technology, including point-of-sale and loan origination systems, compliance and back-office operational expertise — like processors, underwriters, and closers — required to manage the end-to-end mortgage process, we ensure that our community bank partners can profitably offer mortgages as core products without supporting an entire mortgage business.
Digital evolution is here to stay, and big banks and technology companies will always have the advantage of brand recognition and more dollars to invest in the latest technology innovations. But, community banks have options and, often, flexibility that allows them to cater to the specific needs of their community.
Interested in learning about how our tech-driven mortgage solutions can help you remain relevant and competitive in the market? Contact us.