How Mortgage Services are Benefiting from Fintech

May 3, 2019 by

Financial technology (fintech) has transformed many financial processes, including mortgage services. Traditionally provided by banks, various fintech companies are now offering their very own financing, using technology to provide a better service for customers and make processes easier for back-end operations.

A growing number of people are even forgoing banks to secure their mortgages, opting for fintech firms that are embracing technology to provide their customers with the best service possible. Banks are taking note of this, investing in similar financial technologies to help improve their mortgage services and ensure fintech firms don’t begin to overtake the market.

The reason is quite simple – financial technologies allow banks to provide better mortgage services.

Improved Customer Experience

Improving customer experience is one of the driving forces behind the rise of fintech. The mortgage industry is booming, so banks are looking for anything to give themselves the competitive edge when trying to attract borrowers, and fintech has been the answer for many.

Countless mortgage processes are streamlined that offers a better experience for customers. For example, fintech that allows customers to manage their mortgages from a mobile device caters towards millennial borrowers who prefer to use technology to help manage personal finances.

Considering this generation make up one of the largest borrower demographics, providing a customer experience that appeals to millennials is a huge benefit of financial technology that most banks and fintech lenders are taking advantage of.

Faster Approval Rates

Fintech quickens various mortgage processes that are typically very time consuming. For example, chatbots developed using AI technology can quickly process personal data associated with mortgage applications (credit files, income, appraisals, contracts etc.) and lift the data from a single system.

As all previous information would have to be accessed manually from various systems, the approval process can take several weeks to process, and that’s not even guaranteeing approval. Fintech significantly reduces various processes, meaning they save borrowers a lot time waiting for loan approval.

For example, fintech lenders process and approve loans roughly 7.5 days quicker than traditional mortgage lenders do. When it comes to refinancing, which usually takes even longer, the time can be reduced by an average of 9 days.

As the slow approval process is one of the biggest turnoffs of mortgage application, fintech’s ability to reduce the time of this is another key benefit the technology offers.

Efficient Mortgage Advice

Mortgage advisors play an important role in the sector, giving borrowers a detailed break-down of the current market and their financial situation. Banks also specialise in mortgage advice, where customers can come into the branch to discuss mortgage options. Fintech can also improve these services, increasing the likelihood of applicants choosing that specific lender.

Chatbots and robo-advice are one the rising financial technologies that mortgage lenders are using to improve their advisory services. A form of AI technology, these systems can quickly pull up relevant financial data to help offer more accurate mortgage advice, improving the customer experience while giving them a valuable service.

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