Finicity is part of the Mastercard family. Our open banking platform provides the financial data you need.

Lending, Open Banking

Takeaways from the 2019 Ellie Mae Borrower Insights Survey

In March, Ellie Mae released the findings from its annual Borrower Insights Survey. The results of this survey of 2,000 renters and homeowners deliver a valuable window into the motivations and experiences of borrowers. Specifically, this particular survey highlights areas where communication between borrowers and lending professionals can be improved. Let’s take a look at some of those numbers.

How do digital options impact borrower decisions?

According to this survey, the borrower demand for digital options across the mortgage lending process is up 18 percent since 2017. Not too surprising given the digital trends across industries. Just look at retail commerce. In 2016, 1.32 billion people bought goods and services online. By 2021, that number is projected to reach 2.14 billion. In other words, about 164 million people become digital buyers each year. 

Perhaps because of this larger trend to go digital, 50 percent of borrowers surveyed said that they chose their lender based on the availability of an online application or portal. They want the convenience of doing everything on their phone or personal computer. After all, they can do all of their other shopping and spending online. Why not manage their mortgage application online, too? 

What digital options do borrowers use most?

Of those surveyed, the overwhelming majority will take advantage of digital tools when they are part of the lending process. For example, 83 percent of borrowers will use an online portal to electronically sign and notarize documents and 80 percent will use an online portal to upload the various documents required for verification and approval. Even this process remains tied to analog document handling. A truly digital verification process, like that powered by Finicity’s verficiations solutions, results in increased customer satisfaction because it makes it even easier. People also appreciate the convenience of mobile solutions with 78 percent reporting that they used their lender’s mobile app. 

Where do borrowers experience friction in the digital lending process?

About 25 percent of those surveyed reported that they have started an online mortgage application that they later abandoned or completed offline. Some of those borrowers were likely window shopping and weren’t yet ready to complete their application. Considering the high stakes of mortgage borrowing, it makes sense that this number is relatively low compared to rates of abandonment in other industries. Looking at retail numbers, it’s clear that smaller purchases result in higher rates of transaction abandonment. In 2018, about 75 percent of online shopping carts were abandoned. It’s easy to change your mind about a pair of shoes or a new area rug. Filling out a mortgage application involves more thought and commitment.   

Even when online mortgage applications are completed, about half of those surveyed reported that it took multiple sessions to work through the process. This is important because about 60 percent of people that abandoned online applications did so because the process was simply taking too long. And 20 percent of those borrowers went on to choose a new lender. When customer expectations aren’t met, today’s marketplace makes it easy to move on to a new provider. This is where a true digital verification process can make a huge difference. This process avoids potential barriers by going straight to the financial institutions that house financial data. No more uploading documents and trying to make sure everything is in the right place. Streamlined and frictionless, this process increases adoption and significantly reduces borrower abandonment. 

What about offline lending support?  

While it might seem counterintuitive, according to the Borrower Insights Survey, 79 percent of millennial borrowers said that they frequently meet with their lenders in-person. That’s compared to 61 percent of baby boomer participants. Millennial borrowers want more frequent communication and interaction with their lenders to support them across all channels.

Joe Tyrrell, executive vice president of technology and corporate strategy for Ellie Mae, discusses the need for lenders to meet this communication expectation. “As more Millennials enter the housing market,” he explains, “it will be imperative for lenders to prioritize the use of all available technologies, digital tools and communication channels to foster strong borrower relationships throughout each step of the loan lifecycle – from the moment they are interested, all the way through to closing.” 

Finicity provides the data access and insights solutions that help lenders meet and exceed customer expectations. Our digital verification reports make it simple for borrowers and their loan officers to access financial history information. And they are exceptionally accurate. Not only that, but by removing mortgage application roadblocks and paperwork, our solutions drive customer satisfaction and free up resources so that loan officers can focus on their customers.