How digital communications can support mortgage application surgesTopic: Finance & DCAs
With UK unemployment rates continuing to rise and the country entering what is predicted to be one of the worst recessions in 300 years, it is fair to say that 2020 was a financially challenging year. However, owing largely to the government’s Stamp Duty holiday and what some have termed pent up demand, mortgage applications surged last summer, with Experian reporting a year-on-year increase of 13% in July, and 25% in both August and September.
Despite initial caution from lenders, it seems the temporary holiday on Stamp Duty Land Tax, which increased the minimum home value threshold from £125,000 to £500,000, resulted in a significant increase. As Lisa Fretwell, Managing Director of Data Services at Experian, said – “people moving home is good news for the economy, as activity in the property market fuels growth in related services.”
But with this scheme set to end 31st March 2021 and face-to-face interactions reduced for the foreseeable future, brokers and lenders need to consider how they can efficiently manage mortgage and bridging loan application surges.
Afterall, one third of home buyers have said that they would abandon their purchase if they missed the stamp duty holiday deadline and Andrew Montlake, Managing Director of mortgage broker Coreco, recently reported that lenders’ service times have already slipped as a result of the surge in demand.
Clearly, it is essential that brokers and lenders fully understand applicant’s circumstances regarding long-term affordability and this is more challenging in the current climate. But just as digital communications have helped many other sectors operate effectively during the pandemic, they can also help the financial services industry reduce administration and improve application efficiency moving forward.
Send regular applicant updates
Understandably as applicant’s near the land tax holiday deadline, they will be even more keen to monitor their mortgage and loan application progress, to ensure everything is on track to close prior to March 31st 2021. In a bid to keep call volumes to a minimum and enhance the home buyer experience more generally, automated workflows can be used to keep applicant’s up to date while reducing overall admin. With simple SMS notifications, brokers and lenders can provide regular service updates throughout, as well as send reminders of upcoming appointments and required documents.
Reduce direct mail cost and delays
While this will not be possible with all documentation, avoiding postal customer communications where possible, could have a significant impact on both time and cost. With Esendex’s Mobile Letters, a customer can be sent an SMS advising them that they have a document waiting, with an embedded URL link. This link can then take the customer to a web page where they are asked to verify their ID. After doing so, they can then securely download the document directly to their device.
This process can be automated, branded and perhaps most importantly is both traceable and secure. What’s more, clients who have introduced this technology within customer journeys, often benefit from increased customer engagement – vital to mortgage applications.
Utilise the speed and reach of SMS
During the pandemic 70% of smartphone users increased their usage and especially in situations where a swift response is required, harnessing the reach and speed of SMS could prove very worthwhile. With SMS, your communications benefit from an average open rate of 95% and 90% of all messages are read within just 3 minutes. In order to keep application momentum, being able to communicate in such a swift and effective manner can have tangible benefits.
Enhance customer retention
Industry statistics show that three quarters of mortgages go through brokers, but brokers aren’t getting the same share of repeat business. This is a challenge for the intermediary market as building long-term customer relationships is vital to sustainable mortgage advice businesses.
With Esendex’s Mobile Journey’s firms can create low-touch workflows which are triggered close to client renewal dates. By offering customers your services in a convenient manner, right at the time it is most relevant to them, businesses can enhance the customer experience and promote customer retention. What’s more, these workflows are completely customisable, removing the distractions of traditional websites, to deliver higher conversion rates.
These are just a few of the ways digital communications can be used to enable firms to manage their customer applications more effectively and efficiently. Ultimately, with automated, digital communications, skilled workforces can produce both a more efficient and expert service to customers.
The pandemic has pushed businesses to digitalise processes and those who have already begun this journey, will no doubt be seeing the benefits. If you’d like to get started with a more effective communication strategy, please get in touch with our team on 0345 356 5758, or email [email protected] where we’ll direct you to one of our experienced team.