Transforming Financial Institutions Into Aggregators: How To Enable A Data Fabric That Creates New Value Chains In The Broker-lender Relationship

by | Mar 24, 2022

How To Gain Greater Market Share In The Large Broker Led Mortgage Landscape

Having worked with credit unions and similar financial institutions (FIs) for a number of years, we understand that they are focused on improving customer experiences by providing high touch points and enhanced services. The challenge is in developing a roadmap to enable the ecosystem innovation and technology journeys necessary to grow and provide new experiences to customers in conjunction with keeping the personal touch that community financial institutions provide.

A demonstration of the value of personal relationship-based interactions for banking customers is in the mortgage buying cycle. The mortgage buying journey increasingly skews away from FIs and towards the experience of working with a broker, who provides a high-touch, advisory experience for sellers and buyers through an ecosystem of lenders, appraisers, sellers, and other parties.

In this area, the existing origination and technology landscape opens the possibility of new innovations and new value chains in the customer, broker and lender relationships through digital experiences.

Discover how Doxim can help your financial institution expand its mortgage portfolios with third-party integrations…

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How well does your bank or credit union develop relationships with new high performing brokers?

Today in Canada, there are over 20 000 mortgage brokers eager to help customers secure the right mortgage, according to a recent Filogix report. These brokers control 40-50% of the mortgage market, and their share of the market continues to grow. To increase mortgage originations at a bank or credit union, FIs should be looking for ways to harness the power of this workforce.

Most banks and credit unions have relationships with a few mortgage brokers that they work with repeatedly. But to truly boost mortgage origination rates, they need to cast a wider net and become a preferred lender for a broader network of brokers. Developing new relationships with new high performing brokers can be supported by having a tech infrastructure to allow the submission of and communication around opportunities and having it be seamless..

How to gain greater market share in the large broker led mortgage landscape

Currently, big banks in Canada have very close relationships with high performing brokers, controlling over 80%1 of the broker-led lending market. One of the reasons for this stranglehold is that big banks go out of their way to be easy and quick for brokers to work with.

Conversely, mortgage origination at many community banks and credit unions is still a slow and manual process, taking over 45 days to complete and costing 7000-9000 dollars per file. This situation not only reduces customer satisfaction, it also makes these organizations less appealing partners for busy brokers.

Big banks and fintechs are already making strides towards faster and more accurate digital mortgage origination, allowing brokers to close more deals per month with less back and forth. Broker networks will naturally prefer to work with organizations that make their interactions faster and more effortless.

Many mortgage operating models still grapple with elevated costs and long cycle times.

The cost per mortgage is too high and the time required to obtain one is too long... $7,000 - $9,000 Origination cost per loan / >45 days Required to obtain initial or refinance mortgageImage source: McKinsey & Company

Ecosystem innovation: the financial institution as aggregator to ingest mortgages, auto loans, merchant relationships, BNPL users, digital currency customers

End customers, including those working with broker dealers, often have lending needs outside their mortgage to consider. Recent research from the National Association of Realtors indicates that about 95% of home buyers would consider a one-stop-shop model for their home-buying journey, and 79% of home buyers believe bundled services make the buying or selling process more efficient and manageable.

Enterprise Origination Solution to API then through Digital Banking Onboarding, Dealer Finance, Broker Network, Quick-Loan/Micro-Loan Apps, Instant Mortgage Pre-Approval Tool and Fintech Applications. which are Centralized data for Effective Utilization, New & Innovative Business Models and Customer CentricityBy harnessing, bundling and digitizing broker channels, auto dealers, digital assets, merchants, insurance providers and other subservices through a single, centralized origination solution, FIs can grow their lending business and create entirely new digital experiences for end customers.

Building the foundation: what’s next?

Doxim will be focused on building technology to create new digital experiences while also transforming FIs into aggregators through a data fabric that sets the foundation for an Open Banking future. In addition to buoying the broker channel, Doxim will focus on servicing FIs with tools to work with

  • Auto Lending channels
  • Digital-first subservicing
  • Merchants, to onboard onto FI-associated BNPL platform
  • Digital Assets

This use of innovation around digitization creates economies of scale to allow banks or credit unions to gain access to deals from the Canadian broker channel, and to position itself for new, innovative revenue streams from bundled digital experiences.

How Doxim helps banks and credit unions expand their mortgage portfolios with third-party integrations.

The Doxim enterprise origination solution and self-service tools act as a central hub for streamlined document management, document extraction and management, income and asset verification, employment verification, title verification, appraisal management, e-closings, automated compliance, and decisioning through technology create chances, creating gains in rapid fulfillment.

Doxim Digital Origination is a powerful, integrated solution designed to meet all your origination needs through the whole customer journey. It offers a host of features designed to help banks and credit unions expand their lending portfolios, including:

  • Centralized Core Lending Services Create a cost efficient and scalable base for growth, by having core lending services that are centralized and shareable.
  • Standardized Processes Centrally manage all origination using consistent business rules regardless of channels/input sources.
  • Origination API Smooths the integration of data from broker submission to Doxim solution, creating efficiency, speed, and transparency.
  • Aggregated Lending Support Creates room for growth for bundled digital experiences.
  • Shared Integrations Leverage pre-built integrations to enterprise applications including CRM, ECM, and Core Banking.
  • 360 View of the Consumer Access member, household, holdings, loan information, and associated documents in one place for a true 360° view of the member.
  • Channel Continuity Origination requests can continue across channels seamlessly, creating one single source of truth.
  • Better Lending Decisions Readily available customer, business, and third-party data plus robust decision engine to enable better lending decisions.
  • Increased Loan Processing Capacity Lower application processing time, which enables you to process a larger number of applications from the same headcount.

Doxim Digital Origination is the solution you need to expand your broker network relationships

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3. Expansion of digital products

As banking customer behavior shifts, banks must move with the times, or risk getting left behind. Many banks today are exploring the power and potential of open banking, which can allow them to offer more innovative products and services to their customers, as well as to better compete with fintech companies and other non-traditional financial service providers.

As you shift your banking business model to reach new segments or provide an enhanced array of services, communication becomes even more pivotal to your success. After all, if your customers don’t know which new services they qualify for, or how those services will help them meet their goals, then they are unlikely to explore them further. CCM technology can be leveraged here to provide personalized on-statement messaging that directs customers to the right products and services, as well as 1:1 personalized “explainer” videos to help them get started.

Adjusting your bank’s priorities to thrive in 2023

In an era of constant change, the key to successfully transforming your bank’s business model will be to stay attuned to the changing needs and preferences of customers, and to be open to exploring new opportunities and technologies that can help your FI stay competitive and relevant. But these new opportunities are doomed to fail if you do not clearly communicate their benefits and make it simple for customers to access them.

That is why transforming your customer communication strategy is the best first step to broader digital transformation. By updating your approach to communications to meet omnichannel customer needs, you also position your bank to communicate the benefits of changes in your broader organization, like new or enhanced products and services. The pace of change in banking has never been brisker – but with the right strategic approach to these changes, the future is bright.

Investing in a modern customer communication management and engagement platform is an essential part modernizing your banking strategy, as it can provide the personalized digital experiences that will keep your bank or credit union ahead of the competition. It helps provide a great customer experience, and builds rich relationships, which in turn results in customers for life and a competitive advantage in the rapidly evolving financial marketplace.

How Doxim can address the banking customer communications trends identified and help future-proof your digital banking strategy

banking customer communications trends

Doxim’s experienced consultants and omnichannel platform can help transform your customer experience in many ways, including:

  • Gathering and utilizing customer data to continually improve the personalization of communications.
  • Building trust with customers via communication (via print, PDF, HTML, email, text, and online interactive experiences).
  • Leveraging interactive video to drive personalized digital customer experiences, such as interactive statements, bills, or reports, that offer visual engagement and real-time interactivity
  • Putting customer data, including customer statements, at the fingertips of your service representatives for immediate and personal service.
  • Making a meaningful connection with value-added content, like information about philanthropic activities, on customer statements.

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