10 trends in mortgages and the role emerging tech can play
Leveraging fintech solutions to address challenges and maximise opportunities
By identifying mortgage trends, financial institutions and emerging tech providers can leverage fintech solutions to help address challenges and maximise opportunities. According to KPMG Matchi Associate Director, David Milligan, 10 trends worth considering include:
- Mortgage processing margins are declining: Profit-margin outlook remains negative, with competition a primary factor, along with consumer demand, staffing issues, and market trends like shrinking refinance origination volume, rising interest rates and tight inventory.
- Customers want more control over the mortgage process: Self-serve loan origination solutions, like Rocket Mortgage from Quicken Loans, are in high demand. Other technologies helping to create a more efficient mortgage process include electronic notarisation, e-notes, blockchains and data-based electronic verifications of borrower information.
- Mortgage applications are multichannel: About 37% of homeowners used the combination of an online application and in-person interaction to apply for their last mortgage.
- Experiences are improving: Customers expect a more efficient and transparent mortgage experience. In response, lenders are providing customers with more self-service options and advancing their use of data and analytics by widely adopting automation and supervised machine learning capabilities.
- Interactions are proactive and advice-driven: Loan officers are changing from passive data collectors to active consultants. The loan officer role will shift from gathering and inputting data to being a consultant to the consumer, and acting upon the information rather than asking about it.
- Computers are enabling smarter decision-making: The mortgage world will witness smarter decisions being made and automated in place of a heavier reliance on human beings to complete the same tasks, with advancements being made to various automated processes.
- Smart document capture is critical: Automated smart document capture is an important element of the shift toward digital mortgages. Using supervised machine learning technology, smart document capture solutions can improve document classification accuracy, increase document throughput, decrease time to close, reduce overhead and improve productivity.
- Online lending is more personalised: Speed and simplicity are becoming an expectation, and not an add-on. Consumers are already excited about tapping into their relationship bank with credit card rewards, but that can be taken a step further to explore options with mortgage origination fees on a new purchase or refinance.
- New loan products are available: When the fintech revolution began, most of the early players were essentially single-product companies. The days of one-trick ponies in fintech are numbered. More companies will see the need to offer multiple solutions and services.
- Real estate is more receptive to technology: Mortgage lenders are looking for building long term loyalty with their existing homeowners by providing digital home management platforms to help consumers actually manage, maintain, protect and improve their home. This allows them to help homeowners which leads to more repeat and referral business at a much lower customer acquisition cost.
“We’ve seen fintech innovations across the entire mortgage process flow. From education to research, sourcing, credit approval, KYC, authentication, process management, storage and insurance, there are emerging tech providers able to add value. The emerging tech industry is vast, and the problem is not finding fintech solutions – it is cutting through the clutter to find robust solutions aligned to your specific focus areas or pain points.” David Milligan, CEO at Matchi
This is where KPMG Matchi has created its niche – helping its clients to leverage emerging tech to deliver on their strategic business objectives in ways that help to build support with key stakeholders and maximise the odds of success.
Case study
For example, one of the financial institutions we have spoken to:
“The client realised that their mortgage lending business could be under threat from non-banking competitors and identified a specific need to highlight fintech solutions that have potential applicability to their business. Matchi offered to develop a customised Mortgage Radar, which will deliver a landscape view of global fintech solutions operating in the mortgage market – including solutions that impact origination, onboarding and ongoing risk management”
Key benefits to the client include:
- Understanding the global mortgage tech landscape, and which technologies and trends could impact the client’s business.
- Filtering the universe of mortgage tech solutions currently in market against current pain points, for early identification of opportunities to leverage these new technologies for the client’s benefit.
- Enabling the innovation team to inform line management of potential opportunities and threats from global insights, based on a local market knowledge and insights from KPMG Switzerland and interviews.
KPMG Matchi is able to introduce clients to curated solutions that directly address their needs. The company offers a platform of over 6,000 fintech solutions, categorised by focus sectors, fintech theme and geography, and has a track record of working with financial institutions, regulators and governments around the world. To find out more, get in touch.
