In the first quarter of 2020, communications and customer service were completely upended, with many in-person interactions rapidly switching to virtual. While websites, mobile apps and videoconferencing platforms make transactions faster and more convenient, they also have the risk of appearing impersonal.

Real estate has traditionally been a high-touch industry in which lifestyle-altering decisions have considerable financial and emotional impacts. Yet purchasing and financing a home is becoming more digital, with an increasing number of showings, appraisals, mortgage originations and closings happening online.

As logistical considerations, expectations and technological advancements lead to even more digitization, how can the industry not lose sight of that crucial human feel?

Customer Demand is Driving a Hybrid Model

Balancing high-tech with high touch was a priority for lenders even before the pandemic. In a 2020 report by Forbes Insights in association with Freddie Mac, 85% of firms surveyed described their efforts at mortgage digitization prior to COVID-19 as aggressive or very aggressive. During the global crisis, lenders already focused on technological capabilities were the most prepared to help borrowers.

As people have become accustomed to using smartphones for shopping and applying for jobs and expectations for technology continue to increase, lenders are responding by meeting the client where they want to be: on their screens. According to the J.D. Power 2020 U.S. Primary Mortgage Servicer Satisfaction Study, 58% of homeowners say the availability of an online application would likely impact their lender decision, up from 50% in 2018, while 47% say the availability of a mobile app would factor into their decision, compared to 40% in 2018; in addition, 64% of consumers believe that a digital process would make buying a home or refinancing easier than one conducted in person.

Borrowers want to browse for current mortgage rates, compare options and apply as easily as they can order home goods, clothes and even cars, and they want to do it on platforms that are intuitive, responsive, feature-rich and user-friendly. Once they have secured a loan, they expect ease of service via a variety of channels including web portals, chat windows and phone calls: what’s paramount is consistency.

Companies need to make sure that their entire ecosystem—from the website and mobile app to call centers and branches—is connected rather than disjointed or siloed, and offers a smooth, cohesive, client-directed experience.

How to Successfully Balance Tech and People

It’s highly unlikely that any borrower will go all the way through closing without having a live conversation. Even an overwhelming majority (79%) of Gen Z, a demographic known for its preference of digital interactions, said in a 2019 Freddie Mac survey that they would rather have some level of face-to-face interaction with professionals during the purchase of their first home than carry out the process completely online. However, all borrowers should be able to stay in the virtual experience for as long as they choose. To facilitate that:

  • Customers should be able to opt in or out of technology when they want to—not because they are forced by automation implemented for its own sake or by tools that are slow, limited or unintuitive.
  • When they do opt out, they should be offered a clear path that allows them to seamlessly continue the process on the phone or in person without the frustration of having to repeat steps or re-explain details.
  • Institutions can use reporting to identify usage patterns, like the five most-likely actions completed on the mobile app or the step at which users typically switch from the app to the telephone, to fine-tune the experience.
  • The industry can simplify the mortgage process to eliminate redundant, cumbersome or antiquated steps, particularly in the origination process.
  • Lenders can address hesitancy to submit financial data online by implementing practices to make borrowers feel protected, like creating a temporary code to share pertinent information in an encrypted way.

Reimagining Personalized Client Service in a Post-Pandemic World

The digital mortgage process has been an industry disruptor, offering the lowest risk, highest client satisfaction, fastest turnaround time and highest quality. It’s already allowed many borrowers, lenders and investors to save time and money; increased adoption throughout the industry would lead to an even greater impact. More investment exists in fintech, including mortgage-backed technology, than ever before. According to a February 2021 report from Finextra, global fintech investment was $44 billion in 2020, an increase of 14% from 2019. The U.S. attracted the largest share of capital with $22 billion, up by almost a third from 2019.

Yet digitization does not eliminate the need for a human touch to navigate a complex process. Even seasoned, savvy homeowners applying for the second, third, fourth or more mortgage in their lifetimes still welcome a certain degree of personal attention. However, after a year-and-a-half of automatically turning to our phones, laptop cameras, apps and chatbots rather than stepping through the doors and dealing with a person, the concept of high-touch is being reimagined. While people are excited to reconnect “in real life” with family and friends, it remains to be seen if they still require that same level of interaction from the companies with which they do business.

Face-to-face meetings with loan officers may evolve to videoconferences, and mortgage company customer service representatives may walk borrowers over the telephone through the steps of uploading income verification to a mobile interface. Simply being digitally enabled or cutting-edge isn’t enough. The most successful organizations will incorporate a hybrid approach: smartly using technology when customers want it, offering other options when they don’t, all the while retaining consistency in service and staying mindful of authenticity — essential elements to client relationships that will never be obsolete.