This blog post is part of a series of publications on fintechs and mortgage lenders that Reggora has developed in collaboration with a number of premier industry thought leaders. Download the Mortgage Lender’s Guide to Working with Fintechs for free here.
The added value of investing in fintech partnerships is not always apparent to mortgage lenders. Many smaller lenders don’t view investment in fintechs as a good use of resources, while larger lenders often opt to build out internal solutions or stick with outdated legacy platforms.
However, no matter the size of your institution or the relevant pain point that you want to address, it always makes sense to at least consider whether fintechs can provide you with the easiest path forward. Trip Jendron, SVP of Corporate Strategy at Wyndham Capital Mortgage, for example, regularly grapples with the decision of whether or not to invest in the latest fintech trends. His advice is that “it makes more sense to buy if there is a pre-existing proven solution designed to solve a specific problem.” He adds that, on principle, “it is incredibly important for lenders to lean into innovation designed to drive a more cost effective, clear, and convenient experience for customers.”
If you choose to explore the opportunities that fintech partnership can provide your institution, you will see three clear benefits in the areas of resource optimization, innovation, and borrower satisfaction.
1. Optimizing Internal Resources
Fintechs offer easy out of the box solutions that allow your team to spend less time on arduous, time consuming tasks and more time focusing on other specialized, high upside responsibilities. Fintech solutions often automate manual workflows such as accounting tasks, follow-ups to brokers or borrowers, or tedious data entry. As a result, lenders who choose to adopt fintechs to streamline these labor intensive workflows are often able to reallocate internal resources elsewhere and save time and money.
2. Remaining Nimble and Innovative
In the digital age, it’s key that lenders remain at the forefront of new technology offerings. In this regard, Trip Jendron of Wyndham Capital Mortgage points out, “working with fintech partners helps to ensure that your tech stack stays ahead of the curve as you leverage new releases across multiple fronts.” Fintechs have the advantage of possessing deep expertise in one specific area of the loan process. This allows them to invest all of their energy and resources in perfecting individual components of the loan process, and as a result, successful fintech solutions are highly specialized and easy to use. Adopting fintech solutions into both your internal and external workflows will not only streamline your own processes, but it will allow you to market yourself as an accessible, tech-friendly institution, which will likely draw in more borrowers.
3. Retaining a Borrower-Centric Focus
Borrowers today prefer seamless, digital solutions when available. Ellie Mae’s 2019 Borrower Insights Survey determined that the majority of borrowers choose their lending institution depending on digital offerings such as online applications or portals. More importantly, the study stated that borrowers’ preference for digital methods during the loan process has increased 18 percent in the last two years. This number will only continue to increase as younger buyers enter the housing market. As a result, investments in point of sale systems, transparent appraisal platforms, and seamless eClosing technologies can make the difference for lenders vying for borrowers in a competitive market.
Want to read and hear more insights from industry thought leaders? Download the complete Mortgage Lender’s Guide to Working with Fintechs (it’s free!)
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