Digital banking has been on the rise for many years: the pandemic made it imperative. In the past two years, customers no longer merely chose to do their personal banking at home, they were in many cases forced to. Organizations scrambled to adopt digital technologies and supporting processes to position themselves to advantage.
As low interest rates continue to keep the mortgage market active, digital-first mortgage originators and servicers are taking the mortgage market by storm, largely because they provide their customers with an excellent borrowing experience. Recent research by McKinsey showed that almost 60% of borrowers are willing to complete the entire mortgage process online. Today’s consumers want convenience and speed, qualities at which digital-first mortgage companies excel. Traditional mortgage servicing organizations need to pay attention. Going forward, originators are likely to put more weight on borrower satisfaction when selecting preferred mortgage servicers, and modern borrower satisfaction is increasingly dictated by access to approachable digital channels. The reality is that much of the servicing process is still slow, manual, labor intensive, fragmented and has yet to be digitized.
Responsible for all the day-to-day tasks of servicing the loan, mortgage servicers must communicate regularly with borrowers throughout the span of their mortgages. Timely, convenient, transparent communication is key to customer satisfaction. Mortgage originators have the option to choose mortgage servicers based on who they believe will provide their borrowers with the best and most seamless experience. Jim Houston, directors of consumer lending intelligence at J.D. Power says, “Mortgage servicers will really need to up their customer engagement games as the marketplace stabilizes.”
It’s past time for traditional mortgage servicers to advance to the next level of borrower experience. But this necessary upgrade can seem incredibly daunting, especially when a mortgage servicer is tied down by decades-old technology and processes built to service a print-only world. Trapped in that kind of environment, creating and updating borrower communications is a complicated and costly process, happening in separate siloes and at the mercy of glacially slow processes. The manual process is labour intensive, with document creators working in Excel or Word, managing the review and approval workflow with email, lacking the ability to track revisions. When content is finally approved, it gets sent to either an internal IT department or a third-party to be implemented in yet another system. This triggers another manual round of document updates, checks and back and forth that cost servicers unnecessary time and money.
In this kind of traditional customer communications set-up, communications channels have typically been setup in independent silos from each other. Because each channel has its own separate process stream and system, redundancy and duplication of effort abound. The content and templates for that printed letter with a corresponding email and an SMS that points to a PDF on a portal are typically managed in four different systems. The result is the creation and maintenance of hundreds of individual document templates, which heavily relies on IT departments or third-party service providers to implement changes. Mired in this process, a simple correspondence update can take weeks to complete, bottlenecked by competing schedules and responsibilities.
The addition of any new digital channel weaves another layer of complexity. Reliance on third-parties to manage the communications or channels only makes the entire process slower and more costly. When borrower correspondence is managed on an individual level, document by document, template by template, it becomes challenging to enact even the simplest of processes. In fact, the biggest challenge may be to know exactly which templates exist, and where to find them.
This document-centric approach also makes it difficult to manage content variations, such as state-level disclosures and regulatory requirements, which are relevant to only specific borrowers. Typically, all state disclosures end up tacked on the bottom of a letter in a long, confusing stream of verbiage. Borrowers are forced to dig through the entire set of disclosures for the information specifically relevant to their needs and situation.
Such an approach is the opposite of quick, convenient, and transparent, and is thus unlikely to add to customer satisfaction. To solve this problem, mortgage servicers need to rethink their entire borrower communications process and the systems that manage the communications. Communications management solutions that modularize content can break this document-centric, template-centric paradigm.
Modularizing content means breaking down communications into smaller content components that are managed as individual objects. A centrally managed content object that can be shared across multiple touchpoints and channels only needs to be authored or edited once – and then the changes are automatically reflected everywhere that object appears. When mortgage servicers are faced with edits, due to business or regulatory changes, this can save countless hours and dollars.
Content modularization separates content from the presentation layer – the benefit of which is the ability to centrally manage content that can be used across all platforms or across multiple communications in a content hub. This approach requires a shift thinking to move from an all or nothing approach for communications in which you edit, review, and approve a full document vs. focusing solely on the component that is changing. There is no longer a need to redundantly make the same edits in platform after platform to support various digital channels and communications. This also makes it easy to bring new channels online and leverage API-based integrations to mobile apps or secure Web portals to deliver content from a single repository.
Most importantly, modularization of content assists with compliance and content targeting. The same content object such as a disclosure, can be repurposed for multiple communications across channels seamlessly to not only to drive compliance, but also to keep branding consistent. Picture having to change a logo or regulatory disclosure once, instead of opening each communication where that content appears. The approach also promotes flexibility in building communications with the right content components, such as a state disclosure or regulatory variant. Residents of New York, for example, require different disclosure regulations than residents of Hawaii. With modular content, instead of creating multiple communication templates, one for each state, one touchpoint can be used and the appropriate content object will be brought into play only for borrowers of that state.
Mortgage servicers can ensure borrowers see only the disclosures relevant to their own state – without having to build an entirely new communication for each.
Many document management platforms have had basic shared content for years, but limitations in the capabilities and, more importantly, a document-centric mindset have constrained a real move to modular content. Now is the time, as mortgage servicers look to compete with digital-first competitors to make the move – not only to drive efficiency, speed, and reduce costs, but also to be able to seamlessly support customers across all channels.
Digital channels alone aren’t enough to enhance the borrower experience. Part of the appeal of digital channels beyond convenience and speed is that content for these channels is often made more “borrower friendly”. Shorter, clearer content and communications go a long way toward helping borrowers understand their current situation, options, and next steps. There is little worse for a servicer than a confused, frustrated borrower. Today, artificial intelligence (AI) leveraging natural language processing (NLP) can support communications teams in making the content communications more accessible to borrowers. AI can automate the process of checking new and existing content for sentiment, reading levels, and brand consistency, flagging areas that are problematic and require attention. Messaging stays true across every channel, making it easier for borrowers to find information, have their questions answered, and make their decisions.
Borrower satisfaction is a metric of increasing interest to lenders, and therefore something mortgage servicers must devote resources to. Developing the quality and digital accessibility of borrower communications is essential to boosting that satisfaction. Modern customer communications management solutions that modularize content, support content distribution across print and digital channels, and leverage AI can help mortgage servicers not only increase the speed and efficiency of their borrower communications, but also advance the quality, clarity, and compliance of their communications across all channels.
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