DENVER, Colo. — May 23, 2024 — In its May Insights Report, STRATMOR Group explores the opportunities available for financial institutions such as banks and credit unions in the current tough mortgage market. According to STRATMOR, there are several strategies banks can work on right now that don’t directly relate to pricing discipline, cost cutting or operational efficiency, but that can move the dial in terms of gaining market share and improving profitability. Most revolve around improved execution of critical business development activities, rather than on new investments in technology or systems.
In the May InFocus article, Principal Tom Finnegan outlines a roadmap for banks to leverage their strengths and regain their competitive edge. Banks have some natural advantages over independent mortgage banks (IMBs): large customer bases, financial strength and product diversity, he notes.
Despite these advantages, bank market share has declined due to a lack of focus on mortgage marketing and internal referral programs, among other things, according to Finnegan. His article highlights a critical weakness: many bank customers are simply unaware their bank offers mortgages.
While cost-cutting measures offer temporary relief, Finnegan emphasizes the need for a more proactive approach. He offers recommendations for uncovering new leads and shares strategies for creating an improved operating model that will pay dividends both today and in future, more robust volume periods.
Drawing from his own experience as a senior mortgage executive at regional banks, Finnegan encourages bank executives to focus on the mortgage delivery model. “A plan for mortgage is the starting point. The goals must be clear and understood throughout the bank to develop the right target operating model (TOM),” he says. Finnegan recommends banks engage in strategic planning by defining clear goals, targeting select customer segments, and developing a compelling value proposition.
He also advises banks to implement a dedicated mortgage marketing team, as well as train retail staff, leverage existing customer relationships, and create a user-friendly digital mortgage application process. “Retail bank associates with routine customer contact, such as personal or platform bankers, should be equipped with a well-developed referral program that includes a meaningful benefit for those who engage with customers to explore mortgage needs,” Finnegan says.
His article emphasizes the importance of investing in training and quality assurance measures. Reinforcing prospecting skills for loan officers, implementing “secret shopper” programs, and closely monitoring mortgage banking performance are all crucial steps for improvement.
To learn more about STRATMOR’s strategies for banks and credit unions, read Finnegan’s article, “All Hands on Deck: Action Ideas for Banks Navigating This Tough Mortgage Market.”
In a second article in this month’s report, STRATMOR Customer Experience Director Mike Seminari offers tips on cultivating a unique company culture to help individual lenders stand out from the crowd. Seminari uses a recent family trip to Disneyland to show lenders what “Disney magic” can teach them about curating unforgettable experiences for mortgage borrowers.
According to Seminari, “In a high-rate-mortgage environment, a unique company culture is a way to stand out from the crowd. However, simply being nice to your borrowers will not set you apart. You need to be different — unexpectedly and delightfully different.”
Read Seminari’s Customer Experience Tip, “CX Lessons From Disneyland,” for ideas you can start using immediately to create a Disney-level culture in your organization.
Click here to read the May 2024 edition of STRATMOR’s Insights Report.
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