Before the stay-at-home orders of COVID-19 in 2020, 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. Although many businesses have gone back to “normal,” there are still limitations on our ability to lend and work in person.
However, as digital lending has been on the rise in recent years, community banks can continue to cater to their customers from virtually anywhere without the need for in-person applications, document submissions, or closing days among other necessary touchpoints. A unified banking platform allows for the same great customer experiences as physical meetings but with more efficient and automated processes.
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The traditional mortgage experience for borrowers is overwhelming and full of friction, largely due to outdated processes.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 and the digital mortgage solutions that a cloud banking platform, like Blend, can provide:
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’s cloud banking platform combats this issue in multiple customer-centric ways:
- Landing pages that feature the loan officer help to generate interest and allow customers an easy way to start the application online.
- Before applying, potential borrowers can view the latest available rates and different loan scenarios to find solutions that will work for them.
- Customers can self-serve and go through the application on their own, and if stuck at any point, loan officers can help take their application and then send it to the borrower for completion.
- A modern interface guides 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.
- Automated conditions and workflows help uncover any issues upon application submission.
It all adds up. The average conversion rate of mortgage applications across Blend’s customer base is above 70%.
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 mortgage applicants use a mobile device during the application process and over half of borrower activity occurred outside business hours. Upon completion of an application, Blend surfaces requests for documentation from the consumer. Instead of waiting to hear from the lender, consumers can 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 offers a single, integrated experience with all of the necessary functionality, closing out the homebuying process within one cohesive, unified portal. Our closing solution also limits post-closing errors and allows streamlined communication with settlement agents. 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’s cloud banking platform 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. Customers will also get consistent communication and updates about their loan through the channels they choose.
In addition, self-serve pre-approvals build 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.