What are the three critical questions every lender should be asking their technology partners as we enter the new year?
One of the best parts of attending business meetings during the fall conference season is being able to visit with our customers and prospects to attain confirmation that we’re answering the right questions. Spending as much time as we do on the tools we develop, it’s natural that our teams begin to feel like they have all the answers. But answering the wrong questions is counterproductive.
We visited with a variety of lenders and explored many of the questions and challenges they were working through in preparation for the year ahead. There were recurring questions that arose in virtually every conversation that was held. These were the critical questions which every lender should be asking their technology partners now.
Of the key questions we’ve been discussing with lenders this fall, two were general and one was more specific to the tech stacks lenders are considering moving to for competitive reasons next year. We’ll start with that one and then touch on the other two.
Yes; speed, efficiency, customer experience, still matter and they come up anytime a lender talks about their loan origination tech stack. However, in our recent visits with lenders, configurability was a very hot topic.
Lenders are thinking very strategically about next year. They understand the power of data and would like to operate on a single platform that will allow them to aggregate and use that data, across multiple channels, locations, and product lines.
In particular, lenders want to broaden their loan product menus to attract more prospective borrowers in 2023. Many are looking very closely at reverse mortgage lending. While this business is quite dependent upon interest rates, not every lender is convinced they will continue to rise next year.
They’re talking to us about that because with a number of very large reverse lenders operating on our MCP, they know we have the experience in this area. What they want to know is how easy and affordable it is to configure our platform to do everything they want to do next year.
Whether the lender is talking about adding small balance commercial loans, home equity or reverse mortgages, configurability is something every lender should be asking about now.
Even though it seems perfectly reasonable that every lender should be able to create the value chain they find best suited to deliver on their unique strategy, that’s not really the way it has worked here in the past. Too often, lenders are locked out of certain relationships because their technology vendor made them too difficult or expensive.
Lenders are losing patience with this, and I can see why. We’re seeing some real innovation in the market today and lenders want to take full advantage of it. They want access to these new products and services on Day One and want to know that their technology partners will offer them full in-house support.
This sounds like a strange question until you realize that many lenders saw their tech support almost completely dry up as their vendors worked through big mergers and acquisitions this past year. No one wants to live through that again -- or continue to live through it.
M&A can be an extremely disruptive event that can basically take a company offline and into a quiet period right when their customers need them most. That’s something that we haven’t had to deal with for many years and that we have no plans of reliving anytime soon. But it doesn’t hurt our feelings if our customers and prospects ask the question. Success in any endeavor often comes down to having the right information at the right time. Now is the time to get clarity on how each lender will compete for new business in the year ahead. Getting that information is all about asking the right questions. These three questions are an excellent place to start.
By Joe Camerieri, EVP, Sales & Strategy at Mortgage Cadence
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