Digital Technology Top 5 Considerations
Digital technology has changed the face of the lending market and the pace of change across the industry shows no signs of abating. Here are 5 steps that you can take to help make your digital journey a success.
1. Give Customers What They Want
Technology Optimization – More Than An Edge … It’s a Competitive Advantage
Digital technology has put customers firmly in the driving seat by providing them with choice of when and how they interact with lenders. However, recent research published by the Council of Mortgage Lenders (CML) highlights that 2 out of 3 customers prefer to speak to an adviser about complex products, and 4 out of 10 customers want a blend of digital and other channels with access to an adviser at any point in the mortgage journey.
One of the challenges facing mortgage lenders is developing a fully integrated omni-channel proposition that allows the customer to switch seamlessly from digital to other channels – and back – to combine the convenience of 24/7 self-service capability with the reassurance of easy access to a knowledgeable expert adviser when requested.
2. See What’s Happening Below the Surface
“Smoke and Mirror” Pitfalls vs Back Office Investment
While many organizations have implemented a customer-facing digital solution, this has often led to a proliferation of “smoke and mirrors” and added complexity as investment in back office processes has not kept pace with improvements to the front end, leaving operations teams to shoehorn digital applications into legacy systems and processes.
It follows that targeted investment in back office processes will enable firms to remove manual tasks, re-invest capacity in value-adding activities, reduce error rates and provide more consistent outcomes for customers.
3. Keep Up to Date
Fitting New Tech into Existing Strategy
The digital world does not stand still, so it will become increasingly important for lenders to maintain awareness of new developments, consider their practical applications and understand how they might fit with the organization’s digital strategy.
- Robo-advice: recent advancements in the field of Artificial Intelligence mean that it is capable of performing increasingly complex tasks. UK online mortgage intermediaries Habito and Trussle already use digital mortgage advisers, and chatbots can be used to support customer self-service actions and/or provide support to back office staff for policy or compliance queries. In the research from the CML, 4 out of 10 respondents believed that robo-advice will be faster and more convenient than talking to a mortgage adviser.
- Biometrics: the use of voice/facial/touch recognition is gaining traction and has the potential to speed up – and de-risk – existing customer identification processes.
But buyer beware! The rapid addition of new technology components can create compatibility and integration issues which can divert time and effort away from other priorities. Organizations should therefore complete a full impact assessment before layering change on top of existing architecture.
4. Reflect on Your Organization’s Structure
Embracing a Digital Culture: Internally and For Customers
Remaining competitive means that lenders must invest in new and emerging technology, even where doing so will call for enterprise-wide IT prioritization decisions. However, lenders should be mindful that they could inadvertently “sleepwalk” into becoming quasi software development companies – and direct investment to those areas where it directly benefits the customer and/or adds tangible value to the bottom line, i.e. digital technology serves as an enabler rather than an end in itself.
In addition to sustained investment spend, lenders will need to embrace a new digital culture that:
- values new skills which complement traditional core capabilities,
- encourages innovation,
- fosters an agile, iterative approach to development that builds on minimum viable product and quickly incorporates customer feedback into the next development cycle.
Organizations should consider a re-set of risk appetite and drastically reducing change lead times. Firms will also need to re-examine manpower planning, recruitment, reward and retention strategies if they are to build the capabilities they need to succeed in the new digital landscape and compete with employers across a much broader spectrum of industries for highly prized and transferable skills.
5. Reconsider Your Sources of Competition
Keeping Up with The Google(s)
New entrants are continuously emerging with neither the baggage nor the associated overheads of legacy infrastructure. Additionally, firms must now meet the expectations of a new generation of digital customer for whom the benchmark is set not by financial services providers but by Apple, Google and Amazon.
Firms will therefore need to meet customer demand for slick user interfaces, real-time updates and 24/7 availability while wrestling with complex legacy systems and batch processes that do not sit comfortably with the on-demand nature of the digital age.