Better.com’s technology-driven platform offers a glimpse of mortgage lending’s future. In a bid to deliver a “seamless best-in-class customer experience,” the company’s home-buying process is 100% online but includes support when customers need it. To date, Better.com’s financial results are proof that consumer response has been positive to the prospect of a faster, easier home-buying journey.
Better.com’s business model—based on one-stop shopping—isn’t new and has been discussed for years by banks and other financial firms. The company’s strategy parallels what Amazon did for the retail space (i.e. making a clunky, time-consuming buying process easier for the consumer).
While many senior executives believe that one-stop shopping can’t be done in mortgage banking, SoFi, Marcus and Better.com are among the disruptors out to prove otherwise. These companies are receiving large amounts of funding from venture capitalists which means traditional lenders could become irrelevant before they know it.
In today’s hyper-competitive business environment, customer loyalty can turn on a dime. The reason? Consumers will not tolerate a poor customer experience. Every company’s management team knows this. All it takes is one sub-par interaction to motivate consumers to cut ties and move on to another vendor. Rarely does a company get a second chance.
The Rise of One-Stop Shopping
Better.com seeks to bring all the services needed to purchase a home under “one roof.” To accomplish this, the firm has invested in an AI system that matches customers with Realtors, title policies and homeowners insurance. Home services and improvement loans; personal and auto loans; and credit card services are currently in the works for the near term.
Launched just 5 years ago, Better.com has accomplished a lot in a very short time frame. The company originated $14 billion in mortgage loans in the past year alone. The firm contends that its automated decisioning engine has removed bottlenecks from the transaction process while improving productivity and reducing costs. The company’s employees are generating 16 loans per EFT compared to the mortgage industry average of less than 9 loans per employee. Better.com argues that by removing loan officer commissions, it can invest in state-of-the-art technology to ensure a faster, easier transaction and an exceptional home-buying experience.
Banking’s Outdated Business Strategy
The U.S. banking model was deliberately devised to be fragmented and decentralized. Founding fathers Alexander Hamilton and Thomas Jefferson argued their positions and Jefferson’s philosophy won out. Small and local financial institutions were considered better because if they went bust, their failure would not have an outsized impact on the country’s economy.
Over the years, local and small financial firms were touted for their service levels and ability to personalize their products. But with the rise of machine learning and AI, being a smaller company doesn’t always mean that a customer is receiving the best service or products.
As in other industries, financial service firms are now facing the issue that local offices and branches are costly to operate and don’t guarantee that the consumer will be treated well by a knowledgeable employee. In fact, the opposite happens more often than not.
Are you providing prospects and customers with top-level service that ensures repeat and referral business? If not, it’s time to improve your customer experience before it’s too late.
Pat Sherlock is the founder of QFS Sales Solutions, an organization that helps organizations improve their sales talent management and performance. For more information, visit https://patsherlock.com.
