Keeping Brick-and-Mortar Banks Relevant

The mortgage industry is changing. With constant regulatory upheaval, ever-advancing technology, and constantly changing buyer demographics and trends, it’s hard for even the most dedicated mortgage lender to keep up. So how does a brick-and-mortar bank stay relevant and competitive in this always in flux industry? Kevin Gillen, SVP, Mortgage at TD Bank, fills us in. Editor’s note: This select print feature originally appeared in the August 2016 issue of MReport magazine.

MReport: As a brick-and-mortar bank that offers mortgage products and servicing, what would you say consumers expect from their lender in this era of banking disruption?

Gillen: In this whole ecosystem of advancing technology, the primary relationship between the consumer—the homebuyer—is really tied around the real estate agent, and the agent’s go-to person is the mortgage loan officer. So while there are all kinds of models out there, the mortgage loan officer really plays the most mission-critical role. Our Mortgage Service Index revealed that in 2016, twice as many consumers said their loan officer was their most valuable resource in the homebuying process as did in 2015. So even with the advancement of everything that’s going on with technology—the ability to start and stop and get engaged and do research on your own—ultimately, the consumer wants that validation and that trust in their mortgage loan officer.

MReport: You mention technological advancements. Are there ways for a lender to empower its loan officers in this increasingly digital world?

Gillen: As much as that real person—a trusted loan officer and adviser—is there, the originator, the institution, the bank, has got to provide mobile enablement for them to allow the trusted mortgage adviser to work hand-in-hand with the consumer when they’re going through the shopping experience, when they’re doing their research on rates and fees and product options, and when they’re ready to apply. Let’s face it though, if you have lots of products, that could be very, very complex. So using technology to give the consumer full transparency—to give the consumer a choice and help them to make the right decision—is key.

MReport: What else does a lender need to provide to generate customer satisfaction and loyalty?

Gillen: The No. 1 is an on-time closing. That is so incredibly important, especially when you think about the domino impact. Trust and a good circle of referrals is crucial, too. Mortgage loan officers—their whole business, their whole livelihood—is not only based upon the strength of the institution—who they’re working for—but it’s also their rolodex, their centers of influence with financial advisers, with realtors, with developers, with builders, real estate attorneys and CPAs. So the most important thing is if you have a client—if you’ve entrusted your client to another person in this whole ecosystem—you and the person have to fulfill that expectation of trust. You have to be responsive, you have to be accessible, you have to be well-skilled, you have to be transparent, and you have to have unwavering integrity.

MReport: In your opinion, how has technological advancement affected mortgage banking as a whole?

Gillen: There are so many tools and resources and applications that are out there today, that are being developed to help the consumer—really help them make the right decisions. For instance, there are applications out there that help that first-time homebuyer determine the benefits of renting versus buying. Another game changer is the ability to automate and aggregate incoming asset documentation. In this day and age of technology, why should an originator be spending time and money with a processor—especially with the hassle it places on the consumer? As far as business development, it’s becoming a fiercely competitive industry. We all know margins are low, so there’s all types of analytics models, data mining, utilization of GPS and data to better understand you as the consumer.

MReport: Financial technology companies are on the rise in the mortgage space. What can brick-and-mortar banks like yours do to stay competitive?

Gillen: I think the most important thing to do is to take a step back and realize at the end of this is a consumer, a customer. If you keep reminding yourself it’s a home, not a loan, that’s what the customer cares about. So we break it down into really small subsets. Everything we do—every investment—is done so in the spirit of speed. It has to be simple, and it has to be transparent. By transparent, I mean the originator, the processor, the consumer, the customer, the applicant, and if the customer wants, his CPA or his or her real estate agent, all need to know exactly where every single solitary component is, counting down to when they get the keys to the house. There is nothing more frustrating than for a consumer to get a surprise condition or a new requirement 24-48 hours before closing.