Financial services

How financial services can digitize to create a better mortgage lending experience

  • jennifer kim twilio
    Jennifer Kim
  • Sep 23, 2020

Best practices for vetting and implementing new communications channels in banking.

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Financial services companies face a growing list of challenges (and opportunities) that increasingly require digital solutions. COVID-19 has brought that reality into stark focus, and has made digital capabilities a key differentiator in the financial services space.

With limitations around in person interactions, the pandemic has completely transformed how consumers interact with their banks. In fact, one BCG study found that 24 percent of consumers plan on visiting branches less—or not going altogether.

And why should they? If they can buy a car, order food, or even work and learn from home, why shouldn’t the same be true for their financial dealings?

The pandemic has undoubtedly created a lot of challenges and highlighted barriers to operations over the past couple of months. But, it has also served up a multitude of opportunities for banks to differentiate themselves through digitization.

For instance, one Bain study evaluated new account openings across national, superregional and direct banks during COVID-19. They found that account openings on average fell by 23 percent—but that one outlier superregional bank that significantly invested in digital capabilities specifically for the account opening process saw a 45 percent increase in account openings.

The truth is, all financial services companies are now being forced into the digital realm, but those companies that take proactive steps to innovate and transform, to better serve their customers, will lower their operating costs while also improving customer lifetime value.

Now is the time for financial services companies to reassess existing processes and operations to evaluate opportunities to improve the customer experience. Omnichannel, personalization, and self-service options have become top priorities in terms of digitization.

Companies that have solely relied on legacy technologies are limited in its digital capabilities. To innovate, companies need to modernize their infrastructure by adopting a hybrid, multi-cloud approach, curating the omnichannel, personalized customer experience expected.

A case study: mortgage providers

While all financial services companies now require end-to-end virtual experiences, let’s take the mortgage process as one that could be vastly improved with digitization.

With work from home orders, home prices have been booming in most cities. Buying a home usually involves long processing times, lots of back and forth, and heavy amounts of paperwork.

Homebuyers enter the process excited for their new investment, but become exhausted throughout the process: a prime example of how a financial services institution could transform a daunting experience into a positive one.

Buyers want the process to be quick, secure, and easy—and technology-based solutions can make that happen.

Let’s imagine the ideal process for a buyer who is eager to bid on a home and expects fast, knowledgeable responses:

  • A first-time home buyer submits a form to his or her local bank to request a preapproval letter and denotes preferred methods of communication: voice and SMS.

  • The buyer is then quickly matched with a mortgage specialist, on their mobile device, to text questions or get on a phone call to walk through the details of their request. The specialist can pull up the buyer’s existing personal information to have contextual data about the customer so the specialist can answer questions with the customers’ unique profile in mind.

  • The specialist gets the buyer on the line and receives consent to record the call for compliance purposes, which is later automatically stored.

  • Then, in order to proceed with the request, the specialist needs to verify the buyer’s identity. The specialist can directly text a link to start a video stream so the buyer can share his or her identity documentation live. With video, the specialist can meet Know Your Customer (KYC) requirements while also providing another relationship- and trust-building, one-to-one experience.

  • After the buyer’s identity has been securely verified, the specialist can then text and email the documents needed to move forward in the process.

Now reshape that experience for any other financial interaction: updating account information, securing a car loan, or any other number of opportunities for service providers to build better relationships with their customers. The basics remain the same: from offering faster communication channels like SMS, to secure identity verification, to video capabilities that allow for a level of personalization in lieu of in-person interactions, offering an omnichannel experience that gives customers channel optionality is a competitive differentiator.

The bigger trend

The door to digital transformation is wide open. Today’s technology-driven and customer-first options allow companies to implement a customized, multi-cloud approach to offering digital capabilities that enhance the customer journey. While some may be forced, or even dragged, along the path to digital engagement, the companies that thrive (and last) are those that proactively innovate with a digital-first mindset.

Learn more about how to do just that in this free webinar, Banking customer engagement for the new normal. You’ll hear from Marc DeCastro, Research Director of Consumer Banking at IDC, and Bijon Mehta, Global Head of Financial Services at Twilio, as they discuss organizational resiliency, vetting and implementing new communication channels, and demo the mortgage experience described above (hop to 34:00 to get right to the demo).

Twilio for financial services

Find out how Twilio is partnering with financial services providers to improve customer engagement.

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jennifer kim twilio

Jennifer Kim

Jennifer Kim is an Industry Marketing Manager at Twilio, focusing on the Financial Services industry.