Becoming a frontrunner in the changing mortgage market

14 October 2021 Consultancy.eu 4 min. read

Potential mortgage applicants (and their advisors) no longer only look at the price, but also at the mortgage process and their customer experience, according to research by IG&H. “Needs are changing, which confirms the need to take this into account in the organisation, processes and technology,” according to Chris van Winden, a director at IG&H.

Each group has its own needs. While 25- to 35-year olds mainly look for certainty in how much they can borrow, customers over 65 are interested in personal guidance to optimally manage their finances, according to research by IG&H. Meanwhile, other age groups have even different preferences. 

In the experience of Van Winden, many mortgage providers struggle to cater to all this variety. “They typically focus on the short-term, partly due to limited capacity and urgent requests from regulators. As a result, they lose their focus on long-term goals around improving customer satisfaction and revenue.”

How do you become a frontrunner in the mortgage market?

Working on the customer experience is important, “because serving a wide range of customer demands is not easy for mortgage providers,” said Van Winden. “While market participants may currently not feel the sense of urgency, that may change all too quick – for example when a new digital-savvy competitor seizes an opportunity in the market.” 

A legacy IT infrastructure is one of the challenges mortgage providers need to overcome. “Incumbents struggle with complex systems and processes that are not easy to adapt. They are therefore inflexible, while a customer-oriented organisation requires flexibility, structure and overview. Making adjustments takes a lot of time and effort, resulting in loss of turnover,” said Van Winden, quickly adding “however, not acting has even greater consequences.” 

Improving compliance and customer focus

In an ideal scenario, mortgage providers organise their most important business processes in such a way that they can achieve two goals simultaneously: continuous compliance and the transition towards an agile organisation that can focus on long-term goals around improving customer satisfaction and sales. 

In order to realise this, it is necessary to create an overview and structure in the processes, organisation, systems, and data analytics. “When these four elements work well together and connect to each other, it is not only possible to achieve continuous compliance, but also to set course for better results.” 

Van Winden gives an example: “Think of implementing targeted improvements, enabling departments to apply technology quickly and effectively or collecting smart insights to respond to customer needs.”

Tool to determine the bottlenecks

The bottlenecks a mortgage provider faces differ per type of organisation. “For example, we see that some companies need to create insight into processes for external implementation parties. For others, the internal processes are not aligned or the operational set-up makes it difficult to reach the organisation’s unique potential,” said Van Winden. 

Due to the diversity, implementing changes and managing results is easier said than done. “That is why it is important to first determine where the bottlenecks lie.”

Van Winden provides a number of questions that can help identify bottlenecks:

  • Do you know how to convert strategic frameworks and goals into future-proof technological solutions?
  • Do you offer customers an optimal digital experience that is user-friendly and fits their needs?
  • Do you have full insight into processes to be able to implement targeted improvements?
  • Is your organisation agile enough?
  • Are departments able to apply technology quickly and effectively?
  • Do you have an overview and insights to implement changes in a manageable and compliant manner?
  • Do you combine different systems to be able to respond to varying (customer) issues?
  • Is your data up-to-date, safe, and available in the right place in the organisation to be able to use it properly?
  • Do you collect smart insights about customers and respond to customer needs?

“If you can’t answer these questions with a resounding ‘yes’, then there is still room for improvement,” he explained.

Become and remain a leader in the market

“Ideally, organisations are set up in such a way that they are agile, customer-oriented and ‘compliant-by-design’. The latter means that processes and systems are designed in advance in such a way that legislation and regulations and internal policy are always complied with and that the coherence between components is transparent,” said Van Winden. 

“A well-designed organisation creates space for the board to focus on long-term goals and the development of future scenarios. This makes it easier for a mortgage company to become and remain a leader in the market. For example, the use of personal data makes it possible to provide a more personalised advice based on someone’s financial situation and stage of life,” he continued.

After identifying bottlenecks, the next step is to draw up a plan to improve one or more of these elements. “Transforming into a forward-looking organisation requires deep sector and digital expertise.”