Making Mortgages a Relationship Product

Transcription

1 Making Mortgages a Relationship Product Prepared For: Presented By: Daryl Jones, Director djones@crnrstone.com May 4, 2016

2 Daryl Jones Director Daryl Jones puts his strong process improvement and project management background to work at Cornerstone, where he is responsible for overseeing a variety of lending related projects. Daryl has worked with a number of banks and credit unions ranging in focus from local community lending to large, high-volume nationwide lending efforts. He has led successful projects at Cornerstone focused on lending related assessments, system selections, benchmarking and process improvement projects for organizations across the country. Daryl also has a very active role in lending activities at Cornerstone as he oversees the Consumer and Mortgage Lending Communities, facilitates an annual Chief Loan Officer Roundtable as well as various webinars and activities related to GonzoLender, a lending focused knowledge sharing division of Cornerstone. Before joining Cornerstone, Daryl was a project manager for a large Midwestern bank, where he created and implemented a Continuous Process Improvement Unit. Prior to that, Daryl worked in a number of roles at various financial institutions ranging from Project Administrator to Branch Operations Officer overseeing 40 branches. Daryl is among the authors of The Cornerstone Report: Benchmarks and Best Practices and is a contributing author for GonzoBanker and BAI. He is an experienced professional speaker who speaks at various bank and credit union conferences. Daryl is a certified Project Management Professional (PMP) and holds Lean Six Sigma Green Belt and Yellow Belt Certification.

3 Cornerstone Advisors, Inc. National financial services management consulting firm founded in 2002 Specializing in mid-size credit unions and banks with $1- $40 billion in assets 7 key service offerings Strategic Solutions Performance Solutions Technology Solutions Contract and Vendor Management Solutions Payment Solutions Channel Solutions Research and Knowledge Sharing

4 Making Mortgage a Relationship Product

5 Stressed Out

6 CFPB requirements will continue to put pressure on mortgage technology providers delaying robust technological advances Banks need better technology faster than traditional vendors are delivering

7 "It may well be that all of the financial regulators, including the consumer bureau, need to devote greater attention to the unsatisfactory performance of these vendors and how they are affecting the financial marketplace. - CFPB Director, Richard Cordray October 21, 2015

8 Revised 1003 From this To this New 1003 should have the same look/feel as LE & CD. CFPB is using the same design firm as with TRID.

9 Regulatory Drag on Efficiency Mortgage Loans Closed per Total Origination FTE %Change % #Loans Closed / Originator / mos % #Loan Apps / Processor / mos % #Loans Closed / Closer / mos % #Applications / Underwriter / mos % #Closed / Secondary / mos % Source: Cornerstone Report 2012 & 2014

10 What s Fueling the Rocket? A $100M marketing campaign!

11 Responsive design for mobile/tablet Free, no-obligation application <10 minutes from start to Conditional Approval Graphical Product & Pricing Display Real-time rate quotes & rate lock Integration & Automation Tax records Employment verification Automated VOA (like Mint or Yodlee) Credit pull Approved within 30 seconds Closings in as early as 1 week Compliant in all 50 states

12 Alternative Lenders in 2005

13 Alternative Lenders in 2010

14

15 LendIt Conference LendIt is an annual conference for gathering the Digital Lending community. Membership is growing quickly, but still no representation from community banks & credit unions. Source: LendIt.com

16

17 Digital Lending Platform Market Share Real Estate Consumer $3.1T Small Business $0.3T $8.6T Source: Lend Academy Annual Volume: 2014: $8.2B 2015: $20.5B U.S. Market Share Annual Volume: 2014: $3.1B 2015: $7.3B Largest 5 Digital Lending Platforms Annual Volume: 2014: $143M 2015: $800M

18 Mortgage Lending Digital Disrupters Money360 Commercial Real Estate SoFi Student Loans, Personal & Residential Mortgage Loans Lending Home Residential Mortgage Loans, emphasis with investors LendZoan Residential Mortgage Loans ifunding Crowdfunded Real Estate

19 Banking Partnerships

20

21

22

23

24

25 What s Missing?...

26

27

28 Process & delivery constraints are affecting efficiency and Customer Experience

29 Realtors Top Complaints: Lack of frequent communication Last minute changes at the closing table Late closings Repeatedly asking for more information Unexpected interest rate changes Source: Doreen Aldana Mortgage Marketing Coach

30

31 Slow Turn-Times Insufficient Loan Status Poor Service Customer Pain Points Technology UI Duplicate Data Requests Too Much Info Needed

32 Turn-Around Time, in days (Min, Avg, Max) Purchase Refinance Source: 2014 Cornerstone Advisors Mortgage Lending Survey

33 What do Customers expect from a process? - Good Rates - Know me - Cross channel support - To be engaged - Ease of use - Good service - Consistency - Transparency - Rewards

34

35 Moments of Truth

36 Mortgage Experience Illustration Customer becomes aware of Mortgage need Hears about SampleBank from friend. Research SampleBank online (ZMOT) Facebook, Referral network, Google, YouTube, etc. Customer Applies for Loan (FMOT) Process Experience (SMOT & micro-moments ) Closing (SMOT) Servicing / Brand Reinforcement Review/Rate (UMOT) Cycle continues

37 But journeys are merely dreams without process owners and metrics Build a Mortgage Experience Map

38 80% of our revenue growth comes from selling more products to existing customers. Our goal: sell at least eight products to every customer. Dick Kovacevich, former Wells Fargo CEO

39 Mortgage Relationship Best Practices Mortgages should be strategically integrated into the Bank brand.

40 Mortgage Relationship Best Practices Mortgages should be strategically integrated into the Bank brand. Mortgage products are marketed along with all Retail products, including brochures, advertising & web content.

41 Mortgage Relationship Best Practices Mortgages should be strategically integrated into the Bank brand. Mortgage products are marketed along with all Retail products, including brochures, advertising & web content. Set a defined target on household penetration.

42 Mortgage Relationship Best Practices Mortgages should be strategically integrated into the Bank brand. Mortgage products are marketed along with all Retail products, including brochures, advertising & web content. Set a defined target on household penetration. Target-marketing campaigns pass high-quality leads to Loan Officers and results are formally tracked.

43 Mortgage Relationship Best Practices Mortgages should be strategically integrated into the Bank brand. Mortgage products are marketed along with all Retail products, including brochures, advertising & web content. Set a defined target on household penetration. Target-marketing campaigns pass high-quality leads to Loan Officers and results are formally tracked. Branch staff are provided incentives (greater than $100) for referrals that lead to a funded loan.

44 Mortgage Relationship Best Practices Mortgages should be strategically integrated into the Bank brand. Mortgage products are marketed along with all Retail products, including brochures, advertising & web content. Set a defined target on household penetration. Target-marketing campaigns pass high-quality leads to Loan Officers and results are formally tracked. Branch staff are provided incentives (greater than $100) for referrals that lead to a funded loan. Branch staff are adequately and frequently trained on the mortgage process.

45 Mortgage Relationship Best Practices Mortgages should be strategically integrated into the Bank brand. Mortgage products are marketed along with all Retail products, including brochures, advertising & web content. Set a defined target on household penetration. Target-marketing campaigns pass high-quality leads to Loan Officers and results are formally tracked. Branch staff are provided incentives (greater than $100) for referrals that lead to a funded loan. Branch staff are adequately and frequently trained on the mortgage process. Mortgage staff have retail cross-sell goals and incentives. How many Mortgage Loan Officers would pass a test on retail products at the bank?

46 Mortgage Relationship Best Practices Mortgages should be strategically integrated into the Bank brand. Mortgage products are marketed along with all Retail products, including brochures, advertising & web content. Set a defined target on household penetration. Target-marketing campaigns pass high-quality leads to Loan Officers and results are formally tracked. Branch staff are provided incentives (greater than $100) for referrals that lead to a funded loan. Branch staff are adequately and frequently trained on the mortgage process. Mortgage staff have retail cross-sell goals and incentives. How many Mortgage Loan Officers would pass a test on retail products at the bank? Formally track cross-sell production at your institution and identify best practices that work to your organization.

47 Mortgage Relationship Best Practices Mortgages should be strategically integrated into the Bank brand. Mortgage products are marketed along with all Retail products, including brochures, advertising & web content. Set a defined target on household penetration. Target-marketing campaigns pass high-quality leads to Loan Officers and results are formally tracked. Branch staff are provided incentives (greater than $100) for referrals that lead to a funded loan. Branch staff are adequately and frequently trained on the mortgage process. Mortgage staff have retail cross-sell goals and incentives. How many Mortgage Loan Officers would pass a test on retail products at the bank? Formally track cross-sell production at your institution and identify best practices that work to your organization. NPS scores should be systematically captured and encourage social media reviews to institutionalize content for the feedback loop.

48 Mortgage Relationship Best Practices Mortgages should be strategically integrated into the Bank brand. Mortgage products are marketed along with all Retail products, including brochures, advertising & web content. Set a defined target on household penetration. Target-marketing campaigns pass high-quality leads to Loan Officers and results are formally tracked. Branch staff are provided incentives (greater than $100) for referrals that lead to a funded loan. Branch staff are adequately and frequently trained on the mortgage process. Mortgage staff have retail cross-sell goals and incentives. How many Mortgage Loan Officers would pass a test on retail products at the bank? Formally track cross-sell production at your institution and identify best practices that work to your organization. NPS scores should be systematically captured and encourage social media reviews to institutionalize content for the feedback loop. Front products & services on your website with reviews & testimonials.

49 Mortgage Relationship Best Practices Mortgages should be strategically integrated into the Bank brand. Mortgage products are marketed along with all Retail products, including brochures, advertising & web content. Set a defined target on household penetration. Target-marketing campaigns pass high-quality leads to Loan Officers and results are formally tracked. Branch staff are provided incentives (greater than $100) for referrals that lead to a funded loan. Branch staff are adequately and frequently trained on the mortgage process. Mortgage staff have retail cross-sell goals and incentives. How many Mortgage Loan Officers would pass a test on retail products at the bank? Formally track cross-sell production at your institution and identify best practices that work to your organization. NPS scores should be systematically captured and encourage social media reviews to institutionalize content for the feedback loop. Front products & services on your website with reviews & testimonials. Build wow moments into the process to make your organization unique (i.e. videos, real-time text, process status, etc.)

50 In Closing Traditional vendors are being pressured by regulatory requirements. Disruptive Lenders are encroaching on Mortgage watch them closely! Ensure strong Borrower engagement & communication across all channels Craft well designed processes to support the Customer experience and internal staff. Measure the entire Lending Experience

51 A collection of observations, ruminations, predictions and random thoughts on financial services from the team at Cornerstone Advisors. American Banker calls GonzoBanker a hip and flip newsletter. Don t miss out sign up for your FREE subscription today at GonzoBanker is a publication of Cornerstone Advisors, a Scottsdale, Arizona-based consulting firm specializing in best practices strategy, technology and process improvement for banks and credit unions. Visit our Web site at