TheMReport — News and strategies for the evolving mortgage marketplace.
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26 | TH E M R EP O RT FEATURE Do We Have Your Attention? As more fintechs enter the lending and HELOC marketplace, borrowers are presented with abundant options for securing their loan. How can lenders stand out and capture the attention of their potential customers? By John Cabell W hen it comes to the home equity line of credit (HELOC) and personal loan markets, consum- ers have never had more options for—or influence over—who to borrow from and how to manage their financial experiences. Disruptive fintech players have established a firm foothold across the spectrum of lending categories and are finding success in offering specialized, best-of-breed offerings that are challenging traditional full-service financial institutions. As a result, battle lines are being drawn around the balance of intuitive digital engagement and personalized service as the fight for borrower wallet-share heats up. An interesting evolution is underway, in which digital expec- tations across all of the product life stages—from initial shopping experience, through the loan payoff—are rapidly rising. That said, the lending market is a broad and nuanced one, and there are significant differences in preferenc- es across loan product categories. For instance, in the mortgage market, we are seeing demand for a combination of personal and digital services for loans that can be relatively sophisticated. In this category, different portions of the process trigger different demands. On the one hand, borrowers want to digitize and automate the sim- pler and more rote stages, but they also welcome a high-touch service that features personal interactions with advisors for the more com- plicated aspects of the relationship. In short, having the right blend of digital and personal services at the right stages of the loan product is emerging as the key to success in this competitive market. In the HELOC market, we see a similar desire for personalized advice. However, we're also seeing customers become increasingly dissatisfied with the traditionally lengthy process associated with ap- plying and securing a loan. This is causing many borrowers to consid- er alternative digital products that are relatively new to the market. The Fintech Wave of Innovation D isruptive fintechs are among the loan providers that are making it to the top of J.D. Power assessments of institutions with high customer satisfaction rates. Quicken Loans, for instance, has made rapid gains in securing extremely high customer satisfac- tion rates by combining competi- tive interest rates with innovative, digitally enabled experiences. The company has recognized the notion of "speed" as an attribute that is attractive to consumers going through the mortgage pro- cess and has incorporated this as a key differentiator with its Rocket Mortgage product. Not to be outdone, Goldman Sachs has made strides in shedding some of its Wall Street "white- shoe" image with the launch of its online-only offering, Marcus. Nearly three years after its launch date, the online lending platform is scoring high levels of satisfaction due to its ability to deliver funding to customers quickly. Marcus is a terrific example of how traditional lenders are overhauling legacy thinking—and systems—to deliver borrowing experiences that compete effec- tively with the new generation of best-in-class fintech lenders. It also illustrates a trend among estab- lished lenders to develop separate brands and subsidiaries to tackle this market. Traditional Banks Have Plenty of Game T here is still significant value, however, in being a full-ser- vice institution. While traditional players cannot escape investing in new platforms that address digital engagement imperatives, they do have opportunities to leverage—and extend—existing relationships in checking, savings, On the one hand, borrowers want to digitize and automate the simpler and more rote stages, but they also welcome a high-touch service that features personal interactions with advisors for the more complicated aspects of the relationship.