Digital strategies are not just for deepening relationships with customers. The digital experience is also a way to refine and improve processes while also building community trust. 

Today’s guests, Mary Kate Loftus, Executive VP, Director of Digital Banking, and Tim Frederick, Executive VP, Head of Mortgage Originations at M&T Bank, know that digital touch doesn’t replace a human connection with a customer, but it can help define it. Attributing innovation in the mortgage industry to government-led enterprises, Tim Frederick also offers insight into the existing landscape of mortgage lending. 

Digitization and going digital: Leveraging platforms in various ways

Technology touches every aspect of human life, and the world of mortgage lending is no exception. But how can lenders differentiate 'digitization' from 'going digital,' and what influence do they have on the industry?

According to Loftus, the difference between these terms is essential, and each has a hand in influencing the state of banking. Digital transformation describes the shift within a business or business model. Rather than affecting small parts of a business, digital transformation describes an overhaul or transfiguration within an industry.

In comparison, going digital refers to the services provided by an organization and the abilities or systems within a business. Loftus explains that digitization addresses inefficiencies to better meet customers' needs.

Innovation in the mortgage industry and a move away from the “checking account customer”

While several factors influence the mortgage industry, Tim Frederick attributes much of the existing innovation to the government. He also predicts that the government will have a prominent role to play in the future changes and innovations in the mortgage industry. 

Government Sponsored Enterprises (GSEs) often have market control. Whether this can be attributed to government regulations surrounding lending, or the competition between GSEs and private lenders, the government plays a significant role in the shifting landscape of lending.

One of these changes includes shifting away from the traditional focus on the “checking account customer.”

Traditionally, many lenders measure success and growth by the number of checking account customers they have. Rather than offering a singular service or catering to what the client came looking for, lenders have pushed consumers to open accounts, leading to distraction from client goals and false loyalty numbers.

Instead of measuring loyalty and success by checking account numbers, banks are shifting to a mindset of service. According to Loftus and Frederick, this focus on value creation is for the better.

Balancing efficiency with customer insight and satisfaction

As digital becomes increasingly entwined with each lending and banking system, it could easily fall into patterns of improving efficiency and automating processes to improve customer experience.

Increased efficiency and automation are only part of the optimal experience. Customer experience will forever stay rooted in human connection, tailored care, and insight. 

While fast, accurate answers will lend to a positive experience for consumers, it is essential to balance. Incorporating digital too heavily into specific processes risks that balance. However, utilizing digital systems in other ways can enhance the human connection between consumers and lenders.

Gaining insight into the customer's needs, current and past financial state, and goals can help lenders to partner efficiency with personalization. Further, it allows lenders to make informed decisions that will offer greater profitability.

The future of lending will be riddled with innovation and change influenced by digitalization and influential stakeholders such as the government. As a result, organizations must balance diving into the future, serving clients authentically, and retaining profitability in an ever-changing landscape.