Competing in today’s digital lending world

Read time
Published

The following is an excerpt from “The Turning Point for Digital Lending: The quality of your digital lending app is the key to competing in a commodity market”, a whitepaper produced by National Mortgage News magazine and sponsored by Glance.

The process of loan origination is complex. Borrowers wish it was easier and faster. About one-quarter of borrowers start an application online but don’t complete it online, and 60% abandon the application because it takes too long.

Lenders also want loan origination to be easier and faster. An easier digital process for borrowers would translate to higher and faster close rates, lower abandonment, and higher throughput from their team of loan officers.

Competing in a digital lending world

Lenders have plenty of competition in the home loan market—from both traditional banks and digital-only lenders. But, the loan products themselves have become largely commoditized. Interest rates are historically low across all lenders thanks to prevailing Fed policy.

Another reason that mortgages are becoming more of a commodity is that regulations such as the Dodd-Frank Wall Street Reform, Consumer Protection Act, and other regulations defining loan qualifications. These constraints make it difficult for lenders to “think outside the box” and offer innovative products or aggressive qualification as a means of competing in the marketplace.

Borrowers can easily shop around using comparison shopping tools like Credit Karma, Credible, and Lending Tree.

In a world in which loan products all look alike, one of the only things that digital lenders can compete on is the loan origination experience.

Digital lenders have been engaged in a customer experience (CX) arms race ever since Quicken Loans’ Rocket Mortgage raised the bar for borrower-friendly experiences. Lenders often shop each other’s digital origination applications with an eye towards making incremental improvements to their own process to match or beat the competition.

Incremental changes matter: one in five of those who abandon a loan application will choose a different lender.

A better digital experience can help lenders achieve their objectives to:

  • Beat the competition and secure more lending clients
  • Close loans faster
  • Deliver an exceptional loyalty-building borrower experience

If you want to learn more, download the digital lending whitepaper, or read more about Glance Guided CX solutions for financial services.

digital lending cta

Published
Glance Blog

Get the latest in Guided CX

Trends, tips, and insights in human-guided CX.

Financial Services

The importance of customer-centric design in digital banking

Digital banking has entered a realm of no return, propelling forward with unstoppable force. For...

Read Now

Balancing Technology and Humanity to Mold the Future of Banking

The future of banking is digital. The power players knew this before a worldwide pandemic struck....

Read Now

FinovateFall: The Future of Finance is Digital

2020 has forced us out of our comfort zones. The way we learn, the way we work together, the way we...

Read Now

SCHEDULE A DEMO

Join your customers inside your digital spaces

Set your digital customer experience apart from the rest with Glance Guided CX.