Speed to Lead - Optimizing the Customer Lending Experience

An Evolving Home Lending Landscape

The mortgage lending landscape is under intense pressure, responding to an increasingly strict regulatory environment while undergoing a modernization period across the entire value chain.

As the industry continues to recover from the recent housing crisis, the government has increased its regulatory oversight of the industry. Dodd-Frank created a new governing body, the Consumer Financial Protection Board (CFPB). The industry has experienced new servicing rules and origination regulations, specifically to address consumer disclosures (RESPA and TILA or TRID). And in the last two years, a number of lenders have agreed to settle claims of mortgage fraud raised by the federal government.

Every aspect of the mortgage lending industry has experienced challenges that require adaptation. Regulatory requirements have driven sweeping changes to areas such as origination, servicing and default management. For the most part, regulators defined these changes, which have defined delivery requirements and time frames.

Lead management has experienced the most rapid and diverse changes in requirements and has proven the most difficult to adapt. Adaptation is especially challenging in this area because consumers are driving the change, demanding that the industry to move to a more digital environment.

These demands have resulted in many lenders improving their internet presence while expanding their channels of customer communication and interaction. However, agile market disruptors have adapted smartly to market developments, increasing their use of social media and data mining to quickly identify potential customers and understand their motivations. This is creating a niche market of nontraditional lenders that includes digital-only lenders with no branches or “brick and mortar” footprint, independent lenders that use crowdsourcing to obtain funds to lend and small banks with the flexibility to adapt fast.

Customer Sentiment Is an Increasingly Important Driver

In lead management, consumer motivations and expectations are driving significant shifts in behavior, and these in turn have driven numerous innovations to support the new paradigm. These motivations and expectations vary along generational lines and among socioeconomic backgrounds.

For instance Baby Boomers range from being comfortable with shopping for a mortgage at traditional “brick and mortar” locations to wanting to take advantage what the latest technologies have to offer. The millennials, many of whom are just entering the real estate market, seek a customized experience on their own terms. Some want more focused attention and guidance through the process, while others are more interested in a self-service approach with minimal interaction.

The diversification in consumer requirements means that it is becoming more difficult for a single financial institution to have the capabilities to meet the expectations of every type fo consumer. This leaves financial institutions with a choice: Occupy a niche and count on dominating the market share within it, or create an agile capability model that satisfies most of the requirements outlined by consumers.

Evaluating Strategic Options

Most lenders have spent the past five years working on capital-intensive regulatory and compliance projects instead of strategic investments. In evaluating strategic options, understanding the environment and identifying market trends is a critical first step towards defining a future state capability model. An effective model allows an institution to improve its capture rate and productivity while adapting to the changing environment.

The two most important trends observed in leads management:

  • The Age of the Consumer – Significant changes in consumer behavior, motivations and expectations
    • Existing customers expect their current financial providers to know them extremely well and provide a high level of personal service
    • More consumers expect to have online and mobile interactions in addition to the traditional methods, such as at branches and through centralized call centers
    • Consumer focus is rapidly shifting from product and price to customer experience, increasing the need to know customers and enable them to do business in the ways they prefer
  • Social media – Social media has become a valuable source of customer data and outreach

Larger institutions must create a next-generation leads management platform that:

  • Enables multichannel, omnichannel communication – Allowing customers to choose how to interact and utilizing seamless data access and integration across all channels to ensure a smooth customer experience across
  • Utilizes intelligent call routing – Rapidly connecting leads to the right representative to effectively assist them based on their circumstances and needs
  • Integrates CRM capabilities, leads analytics and command center utilities

Process, Queues and Data to Improve the Customer Experience

Traditional leads management calls for interviewing the customer to collect relevant data for the loan application and manually inputting it into the lender’s system. In many cases, data is estimated and not validated until later in the process, which can lead to costly errors, rework and quality issues.

To address this, automatic data collection will become a mainstream process, using tools to aggregate prevalidated data or to automatically validate data after collection. The ability to convert documents and text to useful data has also improved in recent years, with new technologies providing greater speed and accuracy. Additionally, ensuring the availability of internal data can help by prepopulating information from the customer’s existing relationship with the lender, including address, existing loans, accurate payoff balances, assets and liabilities.

Lenders looking to improve their leads management platform must consider the following features and capabilities:

  • Lead filtering, grading and routing – Controlling the distribution of leads to the workforce based on business rules, predictive logic, skills, licensing credentials, geography, existing relationships, complexity and propensity to close. Using data available upon or before contact with the customer enables lenders to determine the best way to route the lead. The goal is to place the right lead with the right person at the right time. Automated queuing capabilities and predictive analytics can ensure that a lead’s specialized needs are met without having multiple people talk to them, transfer them or ask redundant questions at handoffs.
  • Blended telephony – Blended telephony gives inbound callers priority, so agents can continue taking care of their customers swiftly and efficiently while simultaneously conducting outbound campaigns. When inbound calls have finished, the agent can seamlessly return to conducting outbound calls from a waiting queue.
  • Queue-based management – Queue-based selling presents the next best lead to representatives by using analytics and an understanding of the representative’s skills, driving workflow and decision-making for call center representatives. Call results are logged, then the next best lead is presented to the representative, as opposed to having the representative move down the list.
  • Training – Training focus must shift from the current heavy emphasis on regulatory compliance to a sales-centric focus. The workforce must understand that they are part of a sales team, not merely a call center representative, with a goal to help the institution increase sales and productivity.
  • KPIs and metrics – Management’s ability to quickly identify and adapt to trends and challenges will determine success. Implementing a dashboard focused on the appropriate metrics will empower management to find and respond to trends.

Benefits Gained

In addition to developing new capabilities that improve the customer experience, any future state platform should improve productivity and control costs. Creating a useful self-service model, which transfers the effort and responsibility for obtaining information and documentation from the loan officer to the customer, can realize some productivity gains. However, the need for traditional call center capabilities will persist.

Coupling a true blended telephony system with a queue-based approach empowers the institution to optimize the leads management operation: The former effectively manages the balance between inbound calls and outbound campaigns, and the latter uses a queue to present the next best lead to representatives. This approach improves productivity and customer satisfaction, increasing pull-through rates while controlling costs. An approach of this nature will become common in call centers across industries, because it optimizes workforce utilization while also increasing customer satisfaction through reduced wait times and fewer dropped calls.

To effectively obtain and convert future leads, institutions must begin addressing their future platform capabilities today. Waiting until tomorrow will only put them farther behind in the evolving environment of today – and tomorrow.


About the Author

Bryce VanDiver

With a career spanning over 13 years, Bryce is a Managing Principal at Capco in the Payments sector. Solutions-focused and a strong leader, he has carved out a niche in steering business transformation and complex change initiatives to deliver projects for financial service organizations. Bryce is a proven team builder who has achieved success in the implementation of target operating models, solution architecture and IT strategy while leading integrated and cross-functional teams.

Stephen Benetz

Stephen Benetz has over 35 years of experience in the Mortgage industry, including Origination, Servicing, Default Management and Investor Reporting. He has spent over 10 of those years working with the GSEs and top 5 mortgage servicers as a consultant. His areas of expertise include project management and oversight, process management and improvement initiatives including change management, metrics and dashboard planning. Stephen’s work with a variety of financial service organizations has been focused on large technology implementations, process re-engineering, risk identification and management with regards to mortgage operations, automotive lending operations, banking and capital markets.


The content and opinions posted on this blog and any corresponding comments are the personal opinions of the original authors, not those of Capco.