When the 800-pound gorilla arrives, will we collaborate better?
We frequently hear that there will "always be a place for the small business" in the mortgage industry. After all, we've built it on the labor of numerous hard-working small firms.
Individual Realtors, mortgage brokers, entrepreneurial loan officers, title agents, mini-correspondents and others come to mind. We also have numerous success stories about small, privately owned firms which have built themselves into profitable and relevant enterprises.
But that guaranteed "place for small businesses" won't just create itself. There remains the very real possibility of a larger, out-of-industry brand moving into our space and consolidating what many still consider a siloed and disjointed production or fulfillment process. Quite a few small businesses could lose their positioning should that come to pass.
Consider this a call to businesses of all sizes in the mortgage industry to better collaborate. This can be done in numerous ways. For starters, it still feels as if every new technology — no matter what it does or which part of the process it aids — needs to be the driver or the lynchpin for all other parts of the process.
Whether it's a loan origination system, a compliance platform, a vendor management system or one of the myriad other technologies touching the transaction, why is it almost always that the frontline worker still needs to push data from one system to the other using hacks, manual means or third-party apps? Why aren't all of the different systems working better together? That starts with strategy and vision, not just the technology itself.
Fairy tale success stories like Amazon or Apple consolidated their massive empires using revolutionary process and technology innovations. Why couldn't someone like that do the same in the mortgage industry?
Another thing we, as an industry, can do in order to maintain our relevance — even in the face of a giant newcomer seeking to consolidate what it might consider a "supply chain" in other industries — is do a better job educating and informing the root of our business: the consumer.
Don't get me wrong. We're already doing much better than we once did. But, again, it seems as if we do this in silos as well. The Realtor, the broker, the title agent, the loan officer — they all take it upon themselves to bring the confused borrower up to speed, with varying degrees of success and consistency.
But rarely is this a collaborative effort. As a result, the consumer often walks away from the transaction as confused as when he or she started. This is another easy point of entry for an established player in another industry which masters the art of keeping the consumer informed and confident.
Finally, the rolling thunder you hear on the horizon these days is the sound of fraud. Whether we want it to or not, it won't go away on its own. Several entities in our space are admirably rising to meet the threat.
But it's a little late, and there are still far too many players in our space pooh-poohing the threat. While other industries have long since put the fax and the wire to the side as major fraud risks, we're still trying to convince many in the mortgage industry to move on.
A number of tech providers are also starting to offer major innovations. But the adoption has been slow, and far too many consumers are paying the price. If we don't battle this risk through collaboration, innovation and education, perhaps the next big thing will do it for us, putting us into the category of "irrelevant."
We tend to comfort ourselves about the threat of the industry “intruder” — the 800-pound gorilla that comes into our space, acquires what it needs to dominates and renders irrelevant all the rest — by talking about the high level of regulatory and legislative impediments and high cost to produce the product. But are we really sure there's no innovator out there (or even already within our industry) capable of proving us all wrong? Maybe there is a tech-savvy brand ready to revolutionize the process we've clung to for decades. Who wants to be the next Blockbuster Video of the mortgage industry?
Even collaboration won't necessarily stave off the next big thing. But by moving the needle ourselves, we do position ourselves for future success no matter who or what comes along to change our world.