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5 Key Trends Lenders Should Pay Attention To

by David B. Coulter on May 05, 2020, 11:16 AM

5 Key Trends Lenders Should Pay Attention To

Attracting and retaining borrowers is the key to lender success. That’s why staying abreast of rapidly changing fintech trends in the lending space, which are driven by new technologies, is critical. One powerful trend that is unlikely to change is a customer focus in lending. 

1. True Customer Service

Probably no customer service is as vital in the client’s life as what they receive from a mortgage lender. Lenders don’t think of themselves as customer service providers per se, but their decisions will allow, or not allow, the opportunity for a client to not only buy a home, but return for continuing business in the future. For most people, financial decisions in mortgage lending  are the biggest, and most daunting they will make.

When the lender uses tools like ScoreMaster® to help borrowers achieve their goals, they are providing true customer service. Every lender wants an educated customer and every customer an educated lender.  ScoreMaster® uses a gamified system to achieve that end. The reward is a borrower who can qualify for better loans, and a lender with an increase in sales.

2. AI and Machine Learning

Mortgages require a wealth of data – and documentation.  Documentation errors and missing paperwork are major causes of delayed closings and client frustration. Recent artificial intelligence (AI) trends will make such mistakes a thing of the past. Any errors are discovered and corrected at once.

If you aren’t yet using AI and machine learning (ML), it’s a sure bet you soon will. Arguably, no other tools evaluate borrowers more effectively. Using this tech opens up opportunities for borrowers who otherwise might not qualify for a mortgage.

ML has shown that the risk factors of borrowers with identical credit scores change when additional documentation becomes part of the process. A one-size-fits-all lending model is no longer viable in the 2020s. ML helps lenders view customers more holistically. Keep in mind that even identical twins are different people, and it is the small details that reveal whether an applicant is a good candidate.

3. Less Wait Time

AI trends are reducing the customer’s wait time considerably. Time is money, and as Tom Petty once sang, the waiting is the hardest part. Some technologies can help reduce wait time by as much as 50 percent, and in the near future, one-day approval should prove the norm. Refinancing is even faster.

This technology provides a uniform approach to customer acquisition with just one platform. With their user-centered design, Blend and similar technologies maximize loan application conversion rates.

4. Fewer Geographical Lending Restrictions

Today, it’s unlikely you would approve a mortgage on a home clear across the country. Fintech trends aim to change that. Several startups offer lenders access to pre-vetted borrowers, and neither party is especially reliant on local geography to make the loan.

5. Greater Innovation

People have all types of housing needs, and more options to fulfill them. Lenders need more-innovative programs to offer these options based on customer demand. For example, some borrowers would like to rent to own, a possibility seldom offered by traditional lenders. Fintech startups are specializing in such loans, and more traditional lenders should consider making their own forays into less-conventional lending.

How ScoreMaster Can Help

Take advantage of one of the latest trends in digital technology with ScoreMaster, and the trend toward customer focus. Because our gamified system allows borrowers to achieve their best credit scores, they will enjoy lower interest rates and better repayment plans. For lenders, the advantage is better-qualified applicants. For consumers, more credit score points and more money in their pocket. Contact us today to learn more.

*Legal Disclaimer – ScoreMaster is a patent-pending educational feature simulating credit utilization’s effect on credit scores via payments or spending. Your results may vary and are not guaranteed.  

References:

  1. https://www.forbes.com/sites/douglasmerrill/2019/04/04/ai-is-coming-to-take-your-mortgage-woes-away/#431a0b475675