New technologies like artificial intelligence (AI) create a user-friendly environment for customers and provide high-performance, behind-the-scenes data analytics for banks and credit unions. AI and other high-tech systems are able to handle the increasing volume of mortgage applications in ways that benefit both borrowers and lenders. Read on to learn about how you can attract more traffic and mortgage applications by employing new technology that helps applicants with paperless and painless applications.
Streamline Mortgage Applications
Securing a mortgage can be a long, cumbersome process that proves inconvenient and costly to both lenders and borrowers. However, banks and credit unions that embrace new technology for online transactions have opportunities to improve the process.
Innovative lenders who want to increase mortgage applications on their websites need to acquire and use information about their target customers’ preferences to design digital services that appeal to those customers. Doing so results in online interfaces that deliver an excellent user experience and use modern technology for next-generation customers.
Banks and credit unions that digitize the mortgage application process are able to manage the entire journey end to end and provide a more user-friendly experience for customers. The ability to apply for loans and sign documents from home is appealing to many homebuyers, especially since many are becoming accustomed to other business transactions in a paperless environment.
Employ Borrower-Focused AI Strategies
In the past, the focus was on technology designed to streamline processes for lenders. Now, technology should add value to borrowers. Having an in-depth understanding of customers and their needs is critical. Banks and credit unions that focus on customer outcomes while considering which activities could be outsourced will be able to provide higher quality services to home buyers.
While AI strategies can help banks and credit unions make credit decisions and manage risk, they can also provide security and fraud detection that will appeal to borrowers. AI can differentiate real people from bots and alert lenders and borrowers if a potential security breach is detected. It can analyze network data and proactively detect suspicious activity. Furthermore, AI helps lenders assess and price risks associated with mortgage applicants more accurately. This protects lenders from losses and improves both profitability and lenders’ ability to analyze individuals’ detailed credit profiles.
AI strategies can help banks approve more borrowers and remove hidden biases from the approval process. They can provide a more comprehensive look at applicants and approve those who may have short credit histories. These strategies also reduce the need for people to perform repetitive tasks, speeding up the process and allowing banks and credit unions to increase the number of applicants they are able to review and approve.
Intuitive interfaces, especially for the ever-growing mobile environment, are key for keeping applicants happy and cultivating a positive relationship. Much of the AI is behind the scenes for consumers, but the improved user experience and speed of the mortgage process will undoubtedly be visible.
Keep Up With the Online Home-Buying Process
All or part of the home buying process is available online. This trend, which grew steadily throughout 2020 by necessity, is fueled by young, tech-savvy people just entering the housing market. Competition is fierce in many markets, so a smooth, fast process is essential in ensuring successful transactions. In addition to seeking financing online, many home buyers are bidding on homes they’ve only seen online, thanks to features like 360-degree tours. Steps that have commonly moved online include applying for loans, finalizing deals, and notarizing documents.
Online buying trends are sending traffic to mortgage lenders that offer paperless alternatives to the traditional paper-reliant process. Record-low interest rates are also fueling refinancing in addition to boosting home-buying. Competitive markets for buying and selling require the lending markets that fund it to be agile and keep up with trends.
Adapting to changes in technology and the market gives banks and credit unions opportunities to secure new business that would be out of reach using only traditional paper-based means. AI and other technologies from Lendsmart can drive traffic, increase lending business, and improve bank and credit union lending processes from end to end.
Take Advantage of Artificial Intelligence Opportunities
AI has changed how banks and credit unions work, offer products and services, and deliver those services to customers. This technology simulates and augments human intelligence and makes interactions easier. Examples of AI strategies include chatbots that converse with people using everyday language and decision-making systems that approve mortgages based on algorithms.
Computer systems with AI can learn, adapt, and improve key business processes by simplifying interactions in a way that works for both businesses and customers. Investments in AI strategies help lower costs in the long run. Banks and credit unions employing AI will be able to attract the growing demographic that demands convenient and fast online transactions.
Banks and credit unions can also employ AI strategies that allow employees to focus on innovation and problem solving rather than repetitive manual tasks. AI strategies can intelligently automate repetitive tasks, improve workers’ decision-making, streamline customer interactions, create intelligent products and services, and be responsibly deployed.
Due to the power of AI, banks and credit unions should use it ethically, transparently, and with accountability to ensure the technology matches user expectations, company values, and society’s norms and laws. Responsible AI strategies avoid biased data or algorithms, ensure that automated decisions can be justified and explained, and maintain users’ trust and privacy. AI should be governed appropriately, designed, monitored, and trained to confirm it doesn’t uncover personally identifiable information and other data that should be anonymous. The highly regulated finance industry benefits from technology that can prevent unfair practices, security breaches, or noncompliance with internal and external regulations.
AI strategies are rapidly growing and changing the landscape of the mortgage application process. Borrowers, especially those who are tech-savvy, are expecting an intuitive and seamless process they can conduct online. Paperless transactions are becoming more commonplace, especially with changes in remote working since 2020. Much of AI strategies are behind the scenes, but both lenders and borrowers will benefit from a solid AI system. Lenders can incorporate AI features that include user-friendly features for consumers and benefits for lenders, such as approval processes that quickly review applicants using comprehensive credit profiles and ensure secure transactions that protect privacy.
Today’s tech-savvy consumers are accustomed to user-friendly and transparent processes. Adapters of emerging technologies will have a distinct advantage over the competition.