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How Data Can Help Lenders Navigate in a Changing Market

In March 2022, Total Expert Founder and CEO Joe Welu was the featured guest on the Lykken on Lending podcast, with host David Lykken. In this episode, Joe shared insights into current market opportunities and how lenders can leverage data for a more personalized customer journey and lifetime borrower relationship. Here are a few of Joe’s key points:  

What are the opportunities for lenders now that interest rates are increasing?

Markets and the real estate industry are cyclical, and currently, we are in a time of contraction. But opportunities are still present for those organizations with a growth mindset that are willing to lean into the current landscape to increase market share. 

For the past few years, many large, well-run lenders had so much business coming in the door that it was acceptable when some opportunities fell through the cracks. Today, even though the overall volume of loans is down, lenders are saying that there are amazing opportunities to close more deals – but first, it’s crucial for them to optimize the current customer journey to plug the holes. 

We typically focus on two levers when boosting the customer journey. 

  1. Lead-to-close: Lenders are staffed by sales-driven loan officers who excel at the short sales cycle but sometimes lose focus on longer-term deals that might span six to nine months. Those lengthy deals often fall through the cracks. By addressing these, the lead-to-close rate can be increased. 
  2. Lifetime value: World-class brands value and work toward long-term customer relationships. These lenders seek every opportunity to create or surface more opportunities for deals and optimize pull through. By tapping into data, lenders can expand existing customer relationships and increase retention rates. 

In both instances, lenders can leverage customer behavior data and technology to build comprehensive customer profiles and maximize every opportunity. 

For example, property owners have amassed an incredible level of equity over the past few years. With interest rates rising, a lender’s biggest opportunity is in realizing that, even though its best customers might not be able to refinance into a lower-interest loan, these homeowners can still benefit from leveraging the equity that has built up as their property value increased.

How can lenders grow their relationships with current and new borrowers? 

Lenders should keep three simple words in mind when thinking about establishing or expanding their customer relationships: 

  1. Educate: Lenders need to be able to share information about what is going on in the market, including products that might be helpful to clients like adjustable-rate mortgages, interest rates, down payment requirements, and other loan opportunities for first-time homebuyers. This is especially important for Millennial borrowers, who, as a whole, tend to want to get the lay of the land before initiating a transaction. 
  2. Engage: The quality of any relationship is based on the caliber of your communications and the ability to understand what’s important to your customers. Lenders should assess their ability to facilitate good communication with their clients across all channels. And the only way to truly do that at scale is with technology. 
  3. Advise: When a loan officer has the right data available to them and a comprehensive customer profile that includes third-party information, such as from credit bureaus, only then can a lender help the customer make the best financial decision for their individual loan requirements. 

How can lenders support loan officer productivity and build internal support for new technology? 

It’s important to recognize that all sales organizations are fundamentally in the relationship business. Customers value their advisor, and they value the counsel. Establish systems that quickly demonstrate value for the loan officer’s objectives. One example of this could be surfacing an opportunity to the top of a customer’s inbox, and guide what to say to a prospect at their stage in the customer journey. This will go a long way in establishing a long-lasting relationship.

Solutions like Total Expert’s Customer Intelligence enable lenders to compile a 360-degree view of the customer that includes simply the information the customer provided in a loan application and also third-party data such as property value, credit ratings, and current market trends. This gives the loan officer a guide to sharing content that is personalized to each customer and can be adjusted based on how that content is received and engaged with by the customer.

For more of Joe’s conversation with David Lykken, listen to the full Lykken on Lending episode.