While millennials are eager technology adopters and users, they still crave personal interaction, guidance and advice when it comes to making important financial decisions like buying a home, according to JD Power’s 2015 U.S. Primary Mortgage Origination Satisfaction Study.
The study examines customer satisfaction with the mortgage loan origination experience among the nation’s largest mortgage lenders in the United States, and it also provides a guide for how firms can improve the mortgage process.
According to the study, millennials are heavily influenced by an increasingly digital world.
An overwhelming 85 percent of potential future homebuyers own a smartphone, and 94 percent of them begin their home searches online.
Almost three-quarters of millennials say they would be more excited about a new offering in financial services from online titans Google, Amazon, Apple, Paypal or Square than a new offering from their own national bank.
But although digital mortgage lending channels have been proved to reduce lender costs while increasing customer satisfaction, young potential buyers still say technology does not go far enough in educating them about the homebuying process, effectively explaining loan options and terms and providing them with live status updates, according to the study.
The study suggests that some of this dissatisfaction is due to young people having trust issues “in general,” but it also notes that mortgage lenders have been much slower to adopt technology compared to other financial service sectors such as retail banking and the credit card industry.
Mortgage lenders could be pushed to embrace new technology as new, non-traditional players enter the space and challenge current business norms, according to the study.
Going forward, as more functions move online, customers who apply for mortgages online will likely place more importance on an effective review of closing documents and lenders having dynamic websites.
Lenders will also need to find ways to respond to online applications swiftly, give prospective buyers proactive status updates, attempt to head off customer questions before they arise and prevent customers from feeling the need to contact the lender for more information, the study suggests.
But at the end of the day, loan representatives will still be on the front lines when it comes to responding to questions and concerns and ensuring that buyers understand each step of the process, the study notes.
“In addition to a positive lift on customer satisfaction and loyalty metrics, an effective loan rep can also lessen the negative impact of customer pain-points, such as failing to close on the desired date,” the report states.
