Can digital mortgage solutions level the playing field for community banks?

Community banks are capitalizing on recent events by using digital lending to deliver the customer service they're known for at scale.

Blend

Illustration of a mobile phone with a home on it

Before the stay-at-home orders of COVID-19, many community banks around the country may have never needed to consider a digital mortgage solution. The personalized customer service offered by community banks often revolves around in-person interactions. With limitations on our ability to lend and work in person challenging the status quo, now is the time to leverage technology and improve — or discover — digital mortgage solutions. A unified Digital Lending Platform allows community banks with fewer resources to offer a customer experience on the same level as the national lenders.

Solving borrower pain points with a digital mortgage solution

The traditional mortgage experience for borrowers is overwhelming and full of friction, largely due to outdated processes. Not only can mortgage technology solve these issues, but it can also elevate the experience to a positive one, encouraging customers to return for future milestone loans. Customer loyalty is a growing concern for all financial institutions, but it can be an especially difficult challenge for locally owned and operated community banks. Here are three common issues along with the solutions provided by a digital mortgage platform, like Blend:

1. Application fatigue

The first steps of the mortgage process can set the tone for the entire end-to-end experience. When an application is difficult to move through, it leads to higher abandonment rates. Blend combats this issue in multiple customer-centric ways:

Our modern interface is designed to guide customers through the application in clear, easy to understand language.
Data connectivity functionality allows customers to securely connect other financial accounts to automatically complete parts of the application — saving time and limiting exhausting manual entry.
In-line answers to commonly asked questions are built directly into the process, which helps the customer and lets lending teams focus on the really tough questions.

It all adds up. Up to 89% of consumers that start a Blend application submit it.

2. Restrictions about where and when

While face-to-face meetings were once the norm for loan officers and their customers, reliance on in-person interactions can be limiting. Blend gives loan teams the option to start applications over the phone, in person, or send a link to borrowers. When given this flexibility, more than 50% of consumers complete applications after hours and one-third do it on a mobile device or tablet. Upon completion of an application, Blend instantly surfaces requests for documentation from the consumer. Instead of waiting to hear from the lender, consumers can immediately begin uploading documentation and completing tasks — further accelerating the loan cycle.

On the other end of the mortgage process, closing on a home has always required an outdated in-person ceremony. Blend Close now offers a single, integrated experience with all of the necessary functionality, closing out the homebuying process within one cohesive, unified portal. This technology empowers community banks with a powerful advantage for their borrowers.

3. Lack of transparency

A mortgage doesn’t happen overnight. During this complicated process, it’s important to give consumers a sense of their progress, both during the application and throughout the experience. During the application, Blend makes it easy to understand how far along users are; if applicants get confused at any point, a helping hand is a click away with the Co-pilot feature. In addition, the self-serve pre-approval decision builds confidence in the process and lender by providing near-instant feedback about buying power. Our digital mortgage solution enhances the community bank’s customer service capabilities, so a local bank can compete with much larger financial institutions.

Why community banks should partner with Blend

Adopting our digital mortgage solution – and the partnership that comes with it – allows community banks to utilize the same technology that large, national financial institutions use with their customers. Community banks have the opportunity to provide their customers with a unique combination of personalized, local service and best-in-class technology. Blend is building to provide access for everyone — not just the household names.