Industry Insights

How Mortgage Lenders Can Avoid the Amazon Effect, and More

We recently brought together leaders in the mortgage space to talk about How Mortgage Lenders are Embracing Fintechs. The discussion covered the gamut of all things related to the lender <> fintech relationship - from developing a strategy and bringing the right people to the table, to choosing the best technology and evaluating success. The common thread throughout? Digital transformation across the mortgage industry is very real, and mortgage lenders need to embrace technology to keep up (or risk being “amazon effected out of business”).

How can you work strategically with fintech providers to stay ahead of the innovation curve? Below we’ve summarized advice and learnings from our panel of experts. (Want more? Watch the entire panel discussion here.)

Meet the panelists:

  • Christy Soukhamneut: Chief of Staff and Director of Mortgage Strategic Initiatives at Flagstar Bank
  • Kevin Peranio: Chief Lending Officer at PRMG
  • Bryan Amick: SVP, Mortgage Client Journey Leader at Truist 

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Q: Why is it important for mortgage lenders to lean into innovation right now?

Christy:  We are seeing more change in the last year than we’ve seen in the last 10 years... We’ve got to think how to serve customers in a better and different way and deliver what they expect from us, and that expectation is rapidly changing, so if you’re not innovating right now, you’re going to be left behind.

Q: How do you decide where to invest?

Bryan: First and foremost, we would look at our data and our analytics. What problems we want to solve and where we want to focus should present in the data. 

Then, like many places, we have a strategic plan for both our corporation and our line of business. And so for those objectives, what are we looking to accomplish? That should drive what our priorities are. 

Then, increasingly, we’re looking at: what is the actual effort it’s going to take to do something, and what impact will it have? If you were to plot those things out onto a grid, we’re really going to lean and focus in on those things where you have the lowest amount of effort for the highest impact.

Q: How do you decide when to buy a business solution, versus building one in-house?

Kevin: It depends on the task and the business solution. Every company needs to have a clearly defined objective… What do we want that’s different from what we already have, and how much does it cost to build it?

Doing a full blown analysis, I think, is worth it, and at the end of the day, you have other competing jobs - you know? Is it worth your time and effort of your own staff to build something in house, when you can outsource it to a good team, an experienced team, an innovative team, a disruptive team, and use your resources to do something else? I think that’s pretty much how we would evaluate any project. 

Q: How do you stay aware of disruptive technology?

Kevin: Be nosy, ask questions, stick your face in other people's business… It really just comes down to being open and receptive to all things that are out there. I mean, in terms of fintech, disruption comes out of nowhere. We all use some pretty big legacy systems in different areas, and fintech disruption comes out of left field, so if you’re not watching, you’ll miss it.

Q: How do you decide which individuals to include as stakeholders in a project?

Bryan: We’ve had most success when we don’t go what I would call “buckshot” - don’t try to over include people. We really try to go to the right people, the right decision makers, the right people that will be impacted from a resource perspective. 

Q: What are some advantages of tech in the mortgage space?

Kevin: When it comes to embracing fintech, my belief is that the more we all embrace the best technology together, then we can really bring it down to the differentiating factors of our companies, which are our people… to actually personalize and humanize the relationship aspect of this business. 

You have to be a tech company. Every lender is a tech company at this point. If they’re not, they’re gonna get ‘amazon effected’ right out of this business, and they’re done.

Q: How do you evaluate the success of an initiative?

Christy: It’s important to consider how the initiative impacts all your stakeholders, not just the customer… We have long passed where there is one simple solution to everything. Everything is very interconnected and there are dependencies that you may not know about up front, and you have to be flexible as you move through this process. That being said, you still have to decide what success looks like in the beginning so that you know what you’re shooting for. 

I don't care how much time or money you’ve spent, if you realize you have made the wrong choice, it is never too early or too late to turn around and take a better direction for your organization, your employees, and your partners.

Q: How do you decide when to change directions?

Bryan: The switching costs are significant once you get in, the effort and cost to switch is always a barrier. So one of the things that we’re trying to do is build things that can be set up in a way that you’re not locked into something. It’s created in an architecture where you can swap something out fairly easily. So I think we, fundamentally, are challenging ourselves to not be put in that position so that we can stay in front of the innovation curve. 

Q: How do you get people on the same page for an initiative? 

Christy: Think about the scope of the projects. For some projects there is a large impact across the organization regardless of the size, so do you need to have a compliance partner at the table? Assess the project and assess the impact with where it’s going to go, and then make sure that you’ve invited somebody from those teams.

Generally speaking, there’s not a single one of us that’s going to show up that has all the answers, we need those partners and their perspectives in order to deliver a really good product.

Q: How important is it to set a direction early? 

Christy: Look at all the key stakeholders - how do I get them all in a room, and how do I get them all to agree on where we’re heading? … If you know where you’re going, then it’s easy to define what those needle movers are, and it allows you to align your resources behind the things that will make you a better organization.

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For more from Christy, Kevin, and Bryan, check out the recorded webinar.

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How Mortgage Lenders Can Avoid the Amazon Effect, and More