Puneet Taneja, EVP of Banking and Financial Services at Teleperformance in India, discusses the need for lenders to embed Artificial Intelligence into the mortgage application process, highlighting how the technology can create a more seamless customer experience.
The UK housing market witnessed a promising end to 2019, with UK Finance reporting that banks approved the highest number of mortgages in four years in December. A surge in new remortgages has also been revealed, rising to almost 20,000 (18,610), up 5.7 per cent against the same period in 2018. This steady increase is expected to translate into an active first quarter of 2020, defined by post-election market confidence and reduced uncertainty.
Seeking the best deal on the market, customers now have the power to use the internet to instantly compare mortgage rates. Key variables such as customer satisfaction and speed of approval also rank high when customers choose a lender. The more nimble challenger banks of today are able to merge advanced technology to personalise customer services, giving them an automatic competitive edge against traditional lenders burdened with legacy systems. To remain relevant and improve customer retention rates, established mortgage lenders now need to push forward with investment in artificial intelligence (AI) to accommodate higher customer expectations more closely and enrich the user experience.
An Industry in Need of a Revamp
For the majority of buyers, the decision to take out a mortgage or remortgage is one that requires significant planning and several conversations with providers. As a sector, technology is being under-utilised, and heavy reliance on administration can often prolong the application process. If an issue arises at any one stage, it will have a negative knock-on effect on the speed of approval, and delays in processing will immediately flag up as a customer pain-point. The cycle therefore remains both labour intensive and time-consuming – on average taking 45 days to complete.
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When evaluating satisfaction, the amount of effort a customer has to put in when doing business with a company should be factored in. A key determinant on whether a customer will be satisfied, and will return to a company, is how easy it is to connect with an agent, have an issue resolved, or a question answered. If a customer has a straightforward experience with a brand, they are 94 per cent more likely to return no matter the sector. This indicates a real need for mortgage lenders to recalibrate their business strategy and streamline what is often a tedious task.
Digitising the Application Process and Saving Costs
Rather than having to wait countless days for each stage to be verified manually, new technologies should now be harnessed to improve speed and enhance efficiency. AI-powered tools need to be positioned as the solution in managing the surge in remortgages, by mimicking low value administrative tasks such as underwriting which brokers normally spend valuable time on.
Digitising the home-buying process is designed to slash transaction times, with the Teleperformance Lending Suite reducing approval times by 40 per cent, from 11 days to 48 hours, improving transparency within the overall process, as well as cutting costs by almost 50 per cent. Not only does this allow organisations to meet growing expectations of customers more easily, it also reduces stress for brokers. This increase in agility is what gives companies the opportunity to create more meaningful interactions with customers.
Propelling an Omni-Channel Experience
Indeed, servicing customer needs and completing end-to-end fulfilment is the purpose of the mortgage approval process. However, what differentiates an organisation is how they leverage the time saved to build relationships with customers. Considering the value of mortgage commitments, customers place a lot of trust in their chosen lender, and for today’s digital-savvy consumer speed is not enough to secure their business – they are also looking for enriched customer interactions.
This is where a customer-facing innovation is encouraged for traditional lenders. A High-Tech, High-Touch approach to customer service offers a combination of automation and the personal touch, ultimately allowing agents to personalise the service. Whilst data analytics and AI can be introduced to filter information, humans can provide proactive communication and emotional intelligence to reassure consumers throughout.
The accessibility to comparison sites and apps means customers today have significantly less loyalty to established organisations. They are more likely than ever to write negative reviews of their own brand experiences or even switch companies if they receive poor customer service. Therefore, mortgage lenders must recognise that each interaction matters, and prioritise the integration of next-generation technology into the application process, no matter how small.