The ‘digital revolution’ has been underway for some time now; consumer demand for convenience has escalated as technology becomes more advanced, and in the vast majority of industries, there are disruptors primed to shake up the status quo.
The benefits of adopting new technologies is becoming apparent across a wide range of sectors, with solutions that offer lower costs, increased productivity, and a better experience for end users. Despite this, lending has been slow to embrace property technology - or ‘PropTech’ but consumer demand for digital solutions is pushing the industry towards it, and like it or not, lenders who do not recognize how PropTech can optimize their offering, risk being left behind.
PropTech comes in many forms, from the online-only realtors for the time-poor buyer, to document management platforms designed especially for the industry, that are capable of streamlining the mortgage application process for both the lender and the applicant. Disruptors in the industry are not always rebuilding a legacy process or infrastructure from the ground up - they are simply optimizing parts of an entire process to reduce friction - making things faster, cheaper, and more convenient.
Adopting new technology will be critical to survive
Take your typical ‘traditional’ mortgage application process. As it stands, it all starts with a realtor calling a prospective buyer to convince them to view many different properties - a process that may take weeks, or even months to arrange. Homebuyers attitudes have changed, and for millennials in particular, the way in which they want to communicate has shifted away from ‘traditional’ methods, like phone calls and face to face meetings, to mobile messaging and email. In fact, according to the NAR, 50% of millennials search for properties on their phones, and among those 26% end up purchasing a home they found that way. The result? The need for a realtor becomes less and less of a necessity in the homebuying process, which may even lead to them becoming obsolete in years to come.
Despite the early stages of the purchase process being rife with disruptors shaking up the buyer journey, the need for paperwork isn’t going away in the immediate future. Many lenders are still handling paper documents, which is leading to applications being unnecessarily delayed. Again, there are solutions that eliminate these issues. Systems exist that can perform checks on documents within seconds, reducing the amount of time it takes to conduct manual compliance and fraud checks, while simultaneously ensuring regulations are adhered to.
Digital documents are nothing new, and with e-signatures becoming the norm, there is no reason why the entire mortgage process could not be completed entirely online, with no paper documents being involved in the process at all. If mortgage lenders have the appetite for PropTech - whether it’s a great app that notifies buyers when a new property becomes available in their area, or a secure, online portal that applicants can upload all their documentation to, in order to maintain a competitive advantage, lenders need to ensure that their systems and processes are keeping pace with the competition and consumer expectations.
Technology vendors need to be flexible, which means not relying on solutions from incumbent suppliers who are not agile enough to move with the times. This should be a major consideration for lenders when selecting who to work with. Ultimately, lenders that are able to streamline the entire lending process by using technology will come out on top in 2017, and beyond.