Adapting To Digital Natives-Lenders Meet Millennials, And All Consumers, On Their Terms

Kamran Bakhtiari, VP - Marketing, loanDepotWith more than 15 years of executive-level management & consulting expertise, Kamran's professional experience includes consultant & leadership roles at Irvine Company, Verengo Solar Plus, REC Solar, Western Digital, Great call, Ten-X and many others.

The experience of home buying-from financing to shopping to signing most of your docs-has experienced a digital transformation in recent years. And the evolution continues to touch even change-resistant phases of the process.

Now, prospective buyers can virtually `walk' through the rooms of a home they're considering in a neigh boring state or further away. Or place and arrange their current dècor in a prospective new home via augmented reality. According to a New York Times article, apps that expand the home buying and home renovation experience will continue to reshape customer expectations throughout real estate.

How will lending the next, or sometimes first, crucial step in the process-keep up? And what's the most strategic way to market these innovations to a massive audience used to consuming information through ever-changing means?

A Disruptive Revolution
Like many long-established institutions such as healthcare, lending is considered a latecomer to the digital revolution. Several theories persist about what's been the most resistant barrier-protection of sensitive personal information being the most significant. However, today's customers are used to moving fast and completing formerly tedious tasks with rapid efficiency, having minimal patience for old-fashioned hard copy record searches and transfers.

Millennials (or digital natives) are now the largest segment of first-time home buyers, accounting for 66 percent of the market, according to a National Association of Realtors 2017 report, `Real Estate in a Digital Age'. And this generation has far from peaked. The `boom within the boom' years for millennials were 1990 and 1991; those born during that time will bring another surge of population as they reach home buying age. Respectively at 28 and 27 today, their influence is just beginning to register in the world of mortgage lending.

This wave of new buyers is demanding services including shopping and obtaining financing on their terms. To deliver on these new customer expectations, companies must first develop the infrastructure to support it and solve the pains of lighting up a new consumer experience channel. Developing the technology isn't enough; it has to be shared with this audience so they recognize its efficiency and value.
Redefining an Industry
Security is not the only reason lending has lagged behind other large industries as they experienced a wave of digital revolution. Long rooted in tradition from a service standpoint, lending had building relationships and interpersonal contact at its core.

Homebuying is a huge decision that people do not make lightly, no matter what their age, financial situation, or level of tech savviness. In a recent Drive Research survey, the three phrases that most come to mind when thinking about buying and selling of a home are: stress, hassle and money.

Having a personable and trust-worthy expert to help a buyer through the process, particularly the first time, is invaluable when it comes to building knowledge and discovering the norms of the process.

Developing the technology isn't enough; it has to be shared with this audience so they recognize its efficiency and value

You could argue that the changes post-housing crisis helped lay the foundation for the rise of digital innovation in the industry. A niche was created by the pullback of traditional banks that only the most agile organizations would be able to fill. Leading-edge tech platforms have the opportunity to provide key solutions for dealing with progressive regulatory complexity. While so many traditional lenders struggle to transform their lending processes to digital platforms, new lenders make it part of their DNA and brand identity from day one.

Loans on Your Terms
Consumers are different. The differences often break along generational lines, but not without exception. Some people want fast, efficient and convenient service literally at their fingertips as in an app-based experience. Very often, these customers want an answer yesterday. Others want to sit down with the person with whom they're entrusting their life plans and financial information to discuss pros, cons and options from the expert looking out for their best interests.

Communicating that we not only understand these variances in customer approach but have a platform providing for every incidence is key to reaching prospective borrowers but primarily those completely new to a credit- and lending-driven experience. This becomes an opportunity for us to demonstrate value and establish a relationship that can help them achieve today's goal and those to follow.

High Tech, but Personal Touch
Many consumers and later customers may opt for a blend of both service and technology. When they're shopping, which is the consumer phase, they may want to ask more questions and weigh all their options. But once they decide to buy, they become customers and moving the deal along at warp speed becomes the priority. A company providing both service and speed nurtures its customer base and wins market share. These customers share their experiences with their social circles, both interpersonal and virtual, and their story ripples out exponentially. This grounds well of organic positive sharing is based on successive high-quality experiences created by meeting the customer where they are when they first encounter the service provider.

An Evolving Dynamic
As lending finally joins the ongoing digital revolution so do its partner organizations. More and more apps and innovative companies are popping up to help people search, find, buy or sell a home in days. Cooperative marketing with these tools also sign posts for consumers about who can help them achieve their goal the way they're seeking.

Nurturing a harmony between service and technology ultimately reduces the friction customers experience today during buying and selling-especially if they need to sell their current home to close on their next one. This can be an extension of the lending innovators' constant focus on developing products to make borrowing as seamless as possible, and enabling tech to deliver a loan process making the American Dream of home ownership a lot easier to achieve.