Magazine article Mortgage Banking

Enterprise Cross-Sell Offers New Twist on Old Theme

Magazine article Mortgage Banking

Enterprise Cross-Sell Offers New Twist on Old Theme

Article excerpt

There is money to be made in mortgage, but the rules have changed. The old rules required a strong, siloed business unit and tightly controlled channels to generate loans. The new rules rely on demonstrating value within the bank, collaborating to maximize every customer contact and building customer loyalty. Each of these themes is incorporated into the idea of enterprise cross-sell, a new twist on the age-old cross-sell concept.

Successful mortgage lenders have adapted to these changes in creative ways. First, they assert the value of the mortgage during turbulent times, demonstrating its economic importance to the bank. Second, they overcome the traditions of acting as a siloed business unit, which focuses on individual success at the expense of the whole. Finally, they become leaders in the bank's evolution, increasing wallet share and ensuring that every customer contact is maximized. These efforts will increase credibility within the bank, and dramatically increase profits from the mortgage division and the overall institution.

Why loyalty matters

According to Christine Pratt, an analyst with Framingham, Massachusetts-based Financial Insights, two major banking trends are an increased focus on customer centricity and channel investment. Both trends create opportunities for the mortgage division to participate in overall bank strategy and gain additional customers.

In the mortgage field, the idea of customer loyalty has been largely forsaken. Customers, generally unable to differentiate among lenders, will seek the convenience of their most familiar channel or banker, or respond to an ad from LendingTree or Ditech.com.

With a span of years between mortgage purchases, consumers seldom obtain loans from the same provider--despite constant solicitations on statements, fliers and Web sites. The structure of the secondary market and rapid reselling of first loans send a clear message to consumers that the lender doesn't regard mortgage relationships as a priority.

How can the mortgage team benefit from customer loyalty? It can benefit by re-assessing the siloed approach to mortgage origination and taking an integrated approach to channels. This challenges large institutions, because every channel maintains independent connections to every line of business (LOB).

Enterprise decision engines are able to provide effective integration, but often require complete replacement of existing systems. This can be particularly difficult in the mortgage industry, where loan complexity and compliance requirements far exceed those in other lines of business.

What's next?

Recently, many lenders have asked for a solution that consolidates all these business needs. Fortunately, the technology to accomplish this already exists. The next evolution in channel integration is enterprise cross-sell. It provides the benefits of enterprise decisioning, without the requirement to replace many of the existing systems. More important, it supports the unique needs of mortgage bankers by providing bank-wide integration while maintaining control within each LOB.

Enterprise cross-sell defined

Simply stated, enterprise cross-sell allows banks to offer what Zoot Enterprises phrases as the Right Product to the Right Person at the Right Time[TM]. It can be thought of as a middle layer between incoming channels and all LOBs. Offers still come from the LOBs' loan origination system (LOS). Product control remains with each business unit; consistent offers are made; and market changes can be quickly incorporated across all channels.

An advanced rules engine determines the priorities of product offers and ensures conformity across all channels. Using service-oriented architecture (SOA) to integrate platforms avoids the "rip-and-replace" upgrade required in many solutions.

Today dozens of channels support consumer interactions in the branch, over the Web and through indirect brokers. …

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