Making the Move to Mobile: Even as the Origination Side of the Industry Has Made Inroads in Delivering Online and Mobile Applications, Servicing Has Lagged Behind
Cerny, Jeff, Mortgage Banking
When was the last time you looked at your mobile device? II you are like my colleagues and me, it was probably less than five minutes ago. How many meetings have you attended where at least one person in the room pulled out an iPad[R]? Have you read a newspaper in the last week that did not mention the growth of mobile functionality? * Like it or not, we are connected 24/7--and not just to our friends and family, but also to our customers.* Like media outlets, businesses are now on a 24-hour "news" cycle. Consumer demand for constant information continues to grow, and businesses must find ways to interact with their customers on this level.* According to a January 2011 report by Forrester Research Inc., Cambridge, Massachusetts, more than 50 million adults in the United States might be using mobile banking services by 2015. The report estimates there are slightly more than 10 million currently using the service.
Boston-based Aite Group LLC's recent survey of 1,000 U.S. consumers about their mobile banking usage further demonstrates consumers' reliance on mobile devices. They frequently use their mobile devices to check account balances, with 32 percent doing so more than 10 times in the fourth quarter of 2010. It seems that the online channel has also changed payment habits--of mobile banking users, 61 percent are using paper checks less than they did two years prior.
Today's consumers are mimicking the band Queen in singing at the top of their lungs, "I want it all, and I want it now!" And the banking industry is listening. From advancing online banking functions to integrating Web-based personal financial management (PFM) tools and expanding service to the mobile channel, financial institutions have made it clear that consumers should have control of their finances in the palm of their hand.
Unfortunately, the mortgage industry has generally lagged behind in adopting more innovative channels. The origination side, however, has more successfully embraced these emerging technologies than the servicing segment.
Smartphones and tablets have been deployed on a small scale to facilitate day-to-day tasks while staff is out of the office, and borrowers have the ability to search rates from their mobile devices. The appraisal segment also has dabbled in using mobile access to improve workflow and enable the automated upload of information from the field into software at the home office. In fact, according to a company press release, Oklahoma City-based a la mode Inc.'s iPhone[R] and iPad apps for appraisers have surpassed 100,000 installations.
But there is no doubt that the convenience and improvements these tools provide will permeate all areas of the industry--sooner or later. So the question is, at what point will servicers wholeheartedly jump on the bandwagon--and how?
Servicers must begin by expanding their online offering for borrowers, strategically moving these Web-based tools to mobile accessibility, thinking outside the box in terms of further innovation, and addressing privacy and compliance concerns.
The starting line
"Servicers should be pursuing anything that enhances one-on-one communication with the borrower and makes it easier for the borrower to interact with us," says Roy Briggs, vice president of servicing at Tulsa, Oklahoma-based Gateway Mortgage Group LLC.
"With the implementation of single-point-of-contact rules, it is imperative that the borrower communication process be streamlined, and expanding the online and mobile channels is one way to do that," he adds.
Gateway, one of the largest privately held mortgage companies in the Midwest, funds more than $500 million in mortgage loans each year and services nearly $1 billion in residential mortgages. Although its customer base has requested additional mobile capability, such as the option to make payments via a mobile phone, Briggs believes there is still considerable room for expansion using Web-based customer portals. …