Financial institutions are evolving their practices to better respond to the needs and demands of the next generation of customers, including mortgage borrowers.
Speaking at the Mortgage Bankers Association's National Servicing Conference in Dallas Thursday, Lisa Ducharme, senior manager of Ernst & Young's customer experience practice, cited the consulting firm's recent global consumer banking survey and said that bank customers want to engage with institutions over social media and other nontraditional means. She added that survey results show that 92% of respondents in the millennial generation foresee buying a home, but 17% see it as a short-term investment of about five years.
Ducharme went out to explain that 65% of global consumers use financial services comparison websites to find the best deals. The survey also showed that while 21% of U.S. customers age 18-24 prefer the Internet as their preferred method to receive advice about financial products, 35% still prefer face-to-face interaction at a bank branch.
"There's still this connection and wanting to own homes, but we need to get ahead of this and be prepared to deliver information clients the way they want to receive it," she said.
Wells Fargo has a presence on social media, particularly with Facebook and Twitter and is in the process of creating individual Fan pages for its home mortgage consultants. The feedback the bank gets by engaging on social media is both positive and negative, particularly when it comes to customer service.
"There's a risk that customers will come to you with complaints over Facebook and Twitter...but those complaints are going to happen anyways and having those pages on social media help you be a part of those discussions," said Susan Hellrigel, Wells Fargo vice president and marketing program manager.
Dovetailing the online experience is a dynamic where many millennial consumers rely on friends, family and colleagues for advice about financial products like mortgages, with many of those interactions happening over social media.
"It's still very much a personal referral process, especially in the purchase market," said Steve Stein, national sales director for retail lending at GMAC.
Between online education resources and the referrals from friends, consumers have many more options than they did in the past. Banks and other mortgage lenders have to be cognizant of that dynamic in order to build and maintain relationships, said Jason Lambertson, senior manager of Ernst & Young's financial services advisory.
"It offers a unique opportunity for traditional FIs to play in this space by addressing this market with a strategy around digital channels to bring more to the customers where they are," he said.