Buying a house should be exciting. But across the &us team, recent home-buying experiences felt more like a slog – full of clunky applications, confusing options, and lacklustre remortgaging journeys. Given our bread and butter is innovation, we couldn’t help but ask: how can mortgage lenders make this better?
So, we did some digging.
Despite its current shortcomings, the mortgage industry is on the cusp of a major shift. With AI, automation, and a wave of younger buyers entering the market, long-standing frustrations are finally getting attention. Lenders are tackling everything from faster application processing, to improving portfolio performance and the accuracy of risk projection.
The future of mortgages is exciting, but for mortgage lenders operating in a heavily regulated space, change can feel daunting. And when every new solution sounds promising, where do you focus?
To help narrow it down, we’ve pinpointed three opportunity spaces that lenders should explore first, along with some bite-size product ideas to serve as food for thought.
Grow the trust of existing mortgage customers
Deliver a next-level application experience
Seize the power of personalisation
Starting with existing customers makes real sense from a product strategy perspective because it allows you to optimise value from customers you’ve already won. By giving them a first class digital customer experience, you can retain the relationship and unlock greater long-term value.
The reality is that the majority of your customers probably came via a broker – making them 2x more likely to switch lenders at the end of their term. In fact, most lenders have very few touchpoints with buyers after the initial application and setup. Some buyers may not even hear from their lender again until it’s time to renew – that’s years down the track. This means valuable opportunities to build deeper, longer term relationships and loyalty are lost.
How can you grow relationships with existing customers, so when the initial term is complete, they renew with you?
How do you get the basics right with a good user experience and simple technology improvements?
Having unlocked more value from existing customers, it’s now time to shift your focus to new applications. Consider how the process can be better, faster and more efficient for new customers and your own teams.
The current mortgage process is confusing and stressful for buyers. Not only are buyers bombarded with a high volume of information, most buyers (64%) also don’t have a good understanding of mortgage terminology.
How could you make the experience of picking a mortgage for customers as simple as picking a contract for their mobile phone?
Customers aren’t the only ones struggling. The mortgage process is long and arduous for lenders, too. Applications usually take weeks due to resourcing issues and long, regulated processes that cause major bottlenecks. There is also a balancing act between automating what’s safe to automate and streamlining the human decision-making process.
How do you leverage AI as a daily co-pilot to allow your teams to review, and even approve, 10x the number of mortgage applications in a day?
With existing customers and new applications addressed, it’s time to broaden your horizons and think about the future. Explore how deeper personalisation – powered by AI – can open up remarkable new sources of opportunity.
There are over 8,000 mortgage products – but no lender offers a complete set of options for all customer scenarios. As customer needs continue to shift and evolve, many valuable segments continue to go underserved.
Not only that, it also allows brokers to dominate the value chain as customers turn to them to help choose between the muchness of mortgages – costing lenders £1bn in commissions every year. AI creates the opportunity to serve customers tailored mortgage products on a deeper level, across a wider array of scenarios, and at a scale that’s not possible with human staff alone. The potential benefits include the ability to tap into a wider customer base, increase customer loyalty – and even cut out intermediaries all together.
How do you use AI to meet emerging customer needs and a wider range of customer scenarios?
How can AI help you deliver more tailored advice, support and offers directly to customers so that they come to you first – and not a broker?
Where lenders find it particularly tough in this sea of opportunities, is knowing where to start. Afterall, radically improving the mortgage experience has its challenges, including the breadth of opportunities to choose from, the risk and regulations that make change daunting, and difficulty deciding which idea to invest in. These barriers are just some of the reasons why 79% of organisations don’t achieve their innovation goals.
So, how do you become one of the successful 21%? With a little help...