Today’s mortgage businesses must primarily rely on technology to do more with less. In view of the US Federal Reserve hiking interest rates and borrowing costs, banks pulling out of mortgage servicing, and 49% of homebuyers preferring self-service portals, mortgage market participants need to quickly adapt technology to stay competitive. This information is provided by ICE Mortgage Technology. In the Borrower and Lender Insights poll, 90% of participants stated that digital mortgage technology is necessary for a positive customer experience, and 70% stated that using mortgage lending technologies speeds up the loan closing process considerably. The majority of customers prefer to apply for loans online, thus lenders need to employ mortgage technologies that help them satisfy this customer demand and beat their competitors.
We can personally speak to this because Django Stars has extensive experience creating custom software for digital mortgages. We develop B2B interfaces, property evaluation tools, mortgage calculators, and KYC verification capabilities, among other software solutions for fintech companies. Among the case studies in our fintech portfolio are those from Molo, Sindeo, MoneyPark, and Lendage. We would like to talk about our predictions for the major trends in the mortgage industry in 2024 as a result. Having a solid grasp of each fintech product update’s implications and values will help mortgage firms make well-informed judgments.
Market estimates and size for digital mortgage software
The UK’s Financial Conduct Authority reports that by the end of 2023, the value of all residential mortgages amounted to £1,654.3 billion, with new mortgage commitments of £51.5 billion, the industry in the UK is growing at the fastest pace since 2007. Despite the war-induced energy crisis and other factors (like the Bank of England increasing the interest rates), people still need places to live, and property ownership can become one of the drivers of post-COVID recovery. The global market for digital lending platforms reached a value of $5.84 billion in 2021. And it’s expected to grow by 25.9% annually until 2030. This growth is underpinned by various mortgage tech trends as digital technology provides multiple benefits: from streamlined loan origination and informed decision-making to greater compliance and enhanced operational efficiency. Specifically, mortgage industry trends like open banking and blockchain are creating new opportunities that further expand the market for digital lending.
Some trends in mortgage technologies have been around for quite some time — like blockchain, cloud computing, and big data analytics. Other trends, like open APIs or NFTs, are just picking up the pace. However, being informed about them is essential to forecast the future of the mortgage industry and know the right time to integrate technological advancements into mortgage workflows.
Mortgage Technology Trends to Keep an Eye on
Digital mortgage technology is revitalizing a sector that was previously mostly dependent on antiquated infrastructure. Data exchange used to be problematic since mortgage lending operators built internal procedures into isolated infrastructure islands. But in order to deliver a consistent and satisfying user experience, current technologies require seamless data transport.
These are the top mortgage sector trends that are reshaping the tech landscape.
Conversational Chatbots and IDAs
Conversational chatbots will be one of the most significant innovations in the mortgage industry by 2024. Through the use of natural language processing, or NLP, this technology can comprehend and react to questions just like a human would. In 2023, chatbots were a big aid to firms looking to cut costs on customer care. Across a variety of industries, chatbots have helped businesses cut their customer care costs by up to 30%. In terms of human resources efficiency, the chatbot sector is expected to provide substantial financial gains in 2023, with a predicted revenue of approximately $137.6 million. These chatbots imitate human communication, offer intelligent responses to queries, and direct queries to the right representatives in order to pique the interest of prospective borrowers. However, some chatbots are not up to the needs of today. People can always tell when a machine is only selecting preset selections because these machines were designed with a basic rule-based architecture. Instead, they hope to engage in a thorough discussion with an intelligent digital assistant (IDA). At that time, ChatGPT and other advanced AI models come in handy. Because AI-based IDAs are conversational in nature and offer advice rather than just solving certain issues, they have the potential to actually establish and sustain relationships with clients. In order to fully utilize AI’s potential to enhance customer experience and engagement, it is imperative to keep up with conversational AI trends. Real estate firm Berkshire Hathaway HomeServices, based in Chicago, recently unveiled Elle, an online chatbot that offers round-the-clock customer support. It is intended to remember what users want and record conversations so they can continue where they left off. This innovation serves as further proof of BHHS Chicago’s commitment to using technology to enhance the mortgage industry’s client experience. We support this trend by offering our clients fintech solutions development services that include AI-based chatbots and virtual assistants..
Robotic Process Automation (RPA)
Robots are delegated tasks to carry out rule-based processes by means of RPA technology. This technology remains in the enterprise-wide repetitive workflows because it is perfect for automating time-consuming and repetitive operations including uploading files, entering application data into the system, and auditing loan paperwork.
Underwriters now have more time and bandwidth to offer value-adding services since RPA takes care of time-consuming duties. According to a Deloitte report, RPA implementation takes less than a year to break even. Additional advantages consist of:
- 92% increased adherence
- 90% increase in accuracy and quality
- 86% increase in output
- 59% cost savings
Grand View Research estimates that the worldwide RPA market for banking and finance will reach approximately $860.75 million by 2023. Large banks have embraced the technology, like Axis Bank and Deutsche Bank, and the largest banks in Japan are using RPA solutions to save personnel and operating expenses.
Software on the Cloud
The Pay As You Go paradigm of cloud computing ensures scalability, security, and the best possible resource allocation. Major cloud platforms also particularly customize their offerings to fit the needs of the finance industry. Microsoft Cloud for Financial Services offers to assist in risk management, employee empowerment, and profitability acceleration.
Major lending companies like the Virgin Money UK and Navy Federal Credit Union have been quick to give Microsoft’s newly released industry-focused cloud platform a try, and the fintech industry is sure to follow suit. The fintech cloud market is expected to reach over $196 billion globally by 2031, according to PR Newswire research. This data is supported by Django Stars’ experience, as cloud and DevOps are among our most popular services.
Large-scale analytics and data
Lenders utilize data analytics to build comprehensive customer profiles that encompass their customers’ payment histories, activities, and backgrounds. Financial institutions are able to make customer-focused decisions and offer individualized services because to these profiles. For instance, TrustEngine uses big data and AI to automate client profile checks for mortgages whenever there is an equity, credit score update, mortgage inquiry, etc.
ICICI Bank, a leading Indian private lender, relies on its digital infrastructure to future-proof the business. Real-time data analytics is an important ingredient of their IT architecture, which is shifting its focus from products to customers.
Blockchain Technology and NFTs
By tokenizing the mortgage loan, Brightvine is one example of a company using blockchain to revolutionize the mortgage loan processing industry. By tokenizing the mortgage loan, they’re increasing the asset’s liquidity and lowering the costs for borrowers. Another benefit of NFT-based digital mortgages is that lenders and borrowers can store lien information and borrower data on the blockchain. Additionally, because NFTs are non-fungible, buyers can own digital assets that cannot be replicated, giving them added protection against fraudulent transactions.
Software for Document Management
Document-intensive processes are involved in loan approval and verification checks. Document management software gives mortgage companies a safe place to store their files, edit documents, organize them, and utilise imaging solutions. Companies can digitise documents through imaging conversion, file them in organised folders using indexing, and retrieve specific data instantly using metadata. The recent data breach at KeyBank, a regional bank in Ohio, emphasised the importance of using reliable document management software that has data encryption, audit trails, and access control. As a provider of digital mortgage technology development, we wholeheartedly support this focus on security aspects of document management features.
Improvements to the Self-Service
Knowledge bases and customer support sections rank among Django Stars’ most visited website sections, according to data collected from their clientele. According to studies, 73% of consumers would like to solve problems on their own rather than wait for an agent. When PNC Bank, a well-known US financial institution, partnered with Blend, a provider of cloud banking software, to implement an online mortgage application process from start to finish, it demonstrated that it was ahead of its time. Fully digital mortgages are crucial to the future of the mortgage sector, according to Django Stars, since 43% of mortgage borrowers don’t mind completing loan applications through self-service portals.
Acceptance of APIs
Software solutions with API support let lending organizations add different features to their mortgage site. Integrating formerly isolated systems improves customer experience and increases operational efficiency. These enhancements aid in raising revenue, freeing up resources for the business, and facilitating the entry of new mortgage markets. The mortgage sector frequently uses application processing, digital identity, open banking (sharing data between banks), and loan pre-qualification APIs.
