Integrating Digital Does Not Foretell the End for Loan Officers

Forecasting the outlook for the 2015 housing market is a dicey proposition, but there is at least one certainty this year: lenders must embrace digital technologies while also rethinking the role of loan officers.

To take advantage of changing customer demographics and preferences, lenders must capitalize on digital technology. At the same time, digital technology should work in conjunction with, not as a replacement for, the loan officer.

More than one-third of all mortgage customers, and 43% of first-time home buyers, say they don't completely understand the mortgage process, according to a recent study by J.D. Power. The study also found that nearly half of first-timers go to their lender’s local office to meet with a loan representative and receive personalized advice.

Yet, consumers also increasingly say they want to interact with their banks through the web, mobile phone and social media, even as they continue to look for a personal touch to guide them through the mortgage process.

According to Accenture research, a digital generation (Gen D) is emerging, one that is differentiated not by age, but rather by its broad adoption of digital and social channels in almost every aspect of their lives. Gen D is highly inclined to engage with financial institutions through digital technologies. A recent Accenture survey of U.S. retail banking customers found that online sales of mortgages increased 75% from the previous year.

Digital channels can help reduce the administrative burden on loan officers, enabling them to spend more time delivering a superior customer experience, developing relationships with real estate agents and builders so as to position themselves as a market resource, and originating new business.

Today, loan officers are often diverted from these critical functions. Their days are usurped fielding queries from borrowers about the status of loan applications, chasing down missing documents, scheduling closings and managing other procedural issues.

Incorporating digital capabilities into mortgage tools and services can transform the experience of both customers and staff. For example, using the lender's mobile application on their smart phone, a borrower can check the real-time status of their loan application, submit pictures of documentation, receive proactive notices of loan status changes and schedule the closing date.

Digital tools can enable their loan officer, in turn, to offer mortgage products that align with their needs, view the application's progress and provide assistance as needed, use analytics to capture new insights about the applicant, receive alerts notifying when documents are due and updating loan status, and meet their expectations for a closing date.

Despite borrowers' increased reliance on online and mobile tools for mortgage shopping, many still find the learning curve too steep to rely completely on digital channels.

This underscores the key advisory role loan officers must play — educating customers about different loans options, explaining the process and positioning themselves as the driver of a rewarding experience. First-time home buyers, in particular, require a greater degree of hand holding. The real estate market is counting on these buyers to come back in stronger numbers this year to fuel housing demand.

Loan officers are a valuable asset, but lenders can't afford to have them bogged down with administrative functions. In a business where margins continue to be compressed, leveraging the right blend of digital technology and loan officer strengths can transform the mortgage buying experience.

Kelly M. Adkisson is a managing director with Accenture Credit Services