April 25, 2024

Transforming the Future of Lending: How to Elevate Your Consumer and Digital Lending Experience for Banks, Credit Unions, and Mortgage Banks

One of the largest changes to impact the real estate and mortgage industry in the past five years has been a focus on the customer experience. The industry has been forced to shift due to the demands of first time homebuyers. When asked in a 2022 survey, 36% of Millenial and Gen Z buyers indicated the loan process was outdated, slow and lengthy. 

The same article indicates that this new wave of homebuyers, or 80% of them, do want in-person or virtual relationships with their lenders. In fact, 57% said personal guidance and support from their lender would influence who they choose as their loan officer.

What this tells us is that this younger generation of home buyers wants three key things from their mortgage broker:

  • A streamlined home buying experience 
  • Education about the loan process
  • Personalized experiences

For financial institutions, this means it’s never been more important to strike the right balance between technology and value. Now is the time to start leveling up your digital lending experiences to add the personalized, educational, and streamlined experience consumers are seeking.

Key Strategies to Elevate the Digital Lending Experience

For financial institutions rooted in traditional operations and marketing practices, taking the leap to more of an  integrated digital lending experience isn’t going to happen overnight. But there are key strategies you and your lending teams can implement to begin bridging the gap and meeting the needs of modern buyers.  And with the right tools in place, your lenders can not only win more mortgage business, but create loyal, repeat customers for future lending needs.

1. Leverage personalized digital tools

Millennials and Gen Z expect customization. Lenders and their marketing teams should implement dynamic tools that personalize the user experience based on individual financial data and preferences. Features like adjustable mortgage rate calculators, personalized home finance insights, and tailored property value trackers can engage these tech-savvy generations by providing them value that feels uniquely suited to their personal financial journey.

2. Optimize mobile experience

With younger generations using smartphones as their primary internet device, having a mobile-first approach is non-negotiable. As of 2022, 78% of adults in the U.S. prefer to bank via a mobile app or website. It’s safe to assume that if younger buyers want to access their finances from their phones, they likely want to be able to manage their loan process through it as well.

Ensure that your websites and applications are fully optimized for mobile use, offering a seamless, intuitive interface that allows for quick navigation, easy access to loan applications, and real-time updates. Communication with your lenders should also be seamless, making it easy for buyers to ask questions and get updates.

3. Enhance educational content

Adding value to this audience is critical. Only 40% of millennials go into the loan process feeling like they are “somewhat knowledgeable” about buying a home. Providing educational resources that empower and inform buyers about the lending process can set a lender apart. Interactive webinars, bite-sized video content, and comprehensive guides that demystify complex mortgage terms and processes can help build trust and credibility among younger buyers.

4. Streamline the application process

Speed is of importance to younger buyers. A great way to help is to simplify the loan application process with clear, step-by-step guidance and real-time assistance. Incorporating AI-driven chatbots for instant queries, simplifying document uploads with mobile scanning technology, and reducing manual input can enhance user experience and speed up the approval process.

5. Integrate social proof and testimonials

Younger buyers often look to reviews and testimonials before making decisions. According to sources, 74% of consumers say that reviews increase trust in a company, and 49% of consumers trust online reviews as much as personal recommendation. 

Highlighting customer stories and successes on your platform, especially from peers within their age group, can help prospective borrowers feel more confident and connected.

6. Promote sustainable and ethical lending practices 

Transparency about sustainable practices and ethical lending standards can significantly appeal to younger generations who prefer to engage with brands that demonstrate corporate social responsibility. Showcasing efforts in these areas can align your brand with the values important to these demographics.

7. Implement flexible and innovative loan products

Offering flexible loan options such as adjustable-rate mortgages, interest-only loans, or loans that incorporate rental incomes and non-traditional earning sources in application assessments can attract younger buyers who may have diverse income streams.

8. Nurture buyers post-sale 

Fostering long-term connections with clients after the closing of a transaction is essential for cultivating loyalty and ensuring your institution remains their first choice for future financial engagements. By consistently engaging with clients through personalized communications and updates about their home value and market trends, you reinforce the value of your relationship beyond the initial loan process. 

Annual check-ins, tailored advice on leveraging home equity, and invitations to exclusive financial webinars can keep your institution at the forefront of their minds. This ongoing engagement not only enhances client satisfaction but also positions your institution as a lifelong trusted advisor in their home finance journey.

Conclusion: Building Authentic Relationships with Younger Home Buyers 

By understanding preferences, leveraging technology, and prioritizing personalized experiences, financial institutions can establish trust and loyalty with this younger demographic dominating the home lending space.

Tools like Homebot play a pivotal role in empowering consumers with personalized home finance insights, facilitating ongoing engagement post-closing with experts who can help them manage their most significant asset— their home.

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