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Building the Digital Mortgage Experience in New Zealand

The race is on for New Zealand lenders to digitise the mortgage process

A seismic digital shift is taking place in New Zealand’s banking and finance sector. The perfect storm of pandemic restrictions, high inflation, rising interest rates and a stalling property market is driving lenders to seek more streamlined digital strategies to address speed, flexibility and customer convenience.

Smart lenders are now making the move to more sophisticated lending technology. We’re seeing a veritable arms race, with digital weapons and performance-based results. Everyone wants a piece of the digital mortgage action, and it’s easy to see why.

Consider the turnaround time of a typical home loan application – now sitting at an average of three or four weeks to complete. Intelligent digitisation has the potential to reduce this time to hours, even minutes, when properly applied.

Forget wishful thinking. This scenario is entirely realistic, and where New Zealand’s property finance sector is headed.

Reframing the lender as property expert

The current trend for lenders to position themselves as all-round property experts depends on one thing. Data.

It’s no longer enough to arrange finance, then walk away. On both sides of the Tasman, banks are investing in the digital capabilities they need to fully embrace the digital mortgage experience. If they do it right, they win the opportunity to walk side by side with customers, across the life cycle of their home loan.

An end to end data-driven mortgage is the solution to a number of complex challenges impacting lenders in New Zealand, including retention of their existing customers.

Traditional lending processes are being disrupted due to an acceleration in digital adoption, an eroded distribution model, closed branches, and complex new industry regulations.

Lenders are tasked with finding the most accurate and efficient way to determine two things - whether the property in question meets all lending requirements, and whether the consumer buying it has an acceptable risk profile.

There are three important areas where lenders can leverage the transformative power of data in the contemporary lending process.

1. Engaging your customer

Customers want to know that the lender understands their needs, and knows how to meet them. Lenders must determine customers’ financial capacity and the stage they are at in the home buying journey to work out the best way to help them.

In both instances, high quality data is the solution. When detailed and current property information is shared between lender and customer, the lender is in prime position to guide and nurture the customer through their property journey.

Advanced property data helps build this essential personal relationship, providing facts fully tailored to customer finances and their level of market knowledge.

With up-to-the-minute data at their fingertips, the lender can inform the customer about property pricing trends, growth areas and other predictors likely to influence their purchase decision.

This results in more meaningful and targeted discussions. It also makes it more likely the customer will seek ongoing guidance about their future property and financing options.

2. Digitising the application process

Data can transform the application process, offering each customer a personalised experience and a 360-degree view of any given property.

With this kind of access to quality data, customers are equipped with the knowledge and confidence they need to make informed decisions.

Most properties on the market are now subject to a range of predictive modelling techniques. This gives customers pretty much everything they need to know about the property they are considering – including previous owners, pricing, comparative facts and predicted capital growth.

Digitised processes slice through this documentation, shrinking timelines. When pre-populated with key data about the customer’s financial situation and their selected property, the administrative burden is instantly lifted.

By integrating property data with credit information, lenders are able to give customers prompt answers on individual properties in minutes, rather than days.

Data analysis also means potential problems surface early, a boon for both lender and borrower. For instance, a property may quickly be identified as having flood or fire risk, or a safety hazard enabling the customer to move on to the next.

The digitised mortgage process drastically reduces manual handling, human error and inaccurate risk profiles, saving time, money and stress all round.

3. Retaining your customer for life

Given the right digital tools, lenders can support the customer through the entire home ownership lifecycle. Tapping into the customer journey at strategic points, lenders helping customers stay on top of vital property data.

This includes dynamic equity calculation, showing asset value and the amount of equity built up. Lenders can also follow the customer and their property across the decades, staying up to date with sale or rental listings.

In this way, lenders can be proactive in helping customers prepare, plan and secure finance for their next property purchase.
By automating this process with existing home loan portfolios, lenders can reduce refinancing churn, predict the customer’s financial readiness to buy again, and strengthen customer relationships.

Faster valuations, predictive tools and precisely automated processes are overhauling the digital mortgage experience, leading to a more fulfilled and loyal customer base.

Keen to find out more? Visit our banking and lending page to explore options for digitising your lending experience.


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