Partner Article: The Surprising Reason Most Lenders Fail in Their Digital Transformation Initiative

The following post is part of a series of blogs written by MeridianLink Partners who will be attending MeridianLink LIVE! User Forum in May 2022. To learn more about the event,Click here.

By: LenderHomePage

After the refinance boom prompted lenders to expand their teams and rush to implement digital solutions, many were surprised to find they were still struggling with the workload. And now that many lenders are in a hiring freeze, they are wondering how they will be able to effectively manage these loans with a limited team and meet their ever more demanding revenue growth needs.

For these lenders – those who still struggle with volume processing requirements despite the software – there’s a simple but essential reason why it doesn’t work: there are gaps in the workflow.

What it means to have gaps and why it hurts digital transformation and workflow

The promise of digital transformation is not only to go from paper to digital, but also to automate it. However, many confuse mortgage software as just a tool to help “manage the workload.”

Choosing software based on individual tasks rather than how it works as an ecosystem will ultimately lead to failure every time.

To better understand this concept of gaps in the workflow, you want to examine each step of your operations. From the first contact with the consumer to the financing of the loan, consider:

  • What touchpoints do you have in place to reach your digital consumer?
  • What action do they take at this touchpoint, and where does it lead?
  • Once the sender has their information, where do they fill it in and what do they do with it?
  • What automated tactics are in place to help nurture the lead?
  • Are there any similarities between abandoned applications?
  • How much time is spent on each loan file?

From these initial questions, one can begin to drill down to uncover gaps or sticking points in digital processing. It’s important to note that no matter the size of the business, from single brokers to multi-branch lenders, finding the gaps and fixing them is the only way to achieve successful transformation.

The Underlying Benefits of Bridging the Gaps in Digital Transformation

Remember that automation goes beyond managing the current workload. The initiator must also maximize its profit margins. While some argue that technology, by nature, will increase margins by eliminating human-led work, we’ve shown that’s not always the case.

Workflow disruptions are tedious and costly

These POS platforms may have useful features in the product, but when it comes to working in the sender processing ecosystem, it’s totally useless. For example, some mortgage POS platforms have incomplete or broken integrations with third-party systems. Integration can be fragmented to the point where data must be entered manually from POS to CRM and vice versa.

On the other hand, a POS platform with deep integration and intuitive design is extremely valuable and increases productivity, which translates directly into revenue.

Another often overlooked factor in digital transformation is knowing how to leverage it to influence behavior to leverage profitability. For example, in our Loanzify POS platform, we have designed an exclusive in-app self-paid credit mining system called Credit Connect.

Credit Connect is a self-pay feature through which loan applicants can pay for their credit reports. While this feature has massive up-front implications for increasing profit margins by wiping out thousands of dollars on credit draws, it also serves as a sort of “filter” that underscores the prospect’s commitment to completing the application process.

Essentially, once they put some “skin in the game”, the more likely they are to see the app through, minimizing the gap between time spent on leads with high intentions and those with weak intentions.

The fastest way to eliminate most gaps in digital transformation

The initial challenges that lenders face with digital transformation – the research, the decision and the final implementation are overwhelming even for tech savvy people. And just when the lender thinks it’s found the best software for it, it hits the next set of hurdles: the huge spreads that are slowly undermining its productivity and profit margins.

The solution? Prioritize platforms with an all-in-one approach where each component has the most critical functions built into its structure and the ability to work together seamlessly, allowing the lender to quickly build their digital solution.

To Lender homepagewe make it incredibly easy to achieve non-disruptive digital transformation in minutes.

Starting with our flagship mortgage websites, lenders can add a centralized lending hub with our Loanzify POS, as well as stack on a mobile mortgage app with Digital 1003. Lenders ready to dominate with their digital presence can also take advantage of our local SEO and social media marketing. Plus, enhance your brand image with our Creative On-Demand.

The mortgage industry is filled with many challenges and uncertainties. But with LenderHomePage’s suite of digital mortgage products, digital transformation doesn’t have to be a part of it.

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