Over the past few years, every aspect of the mortgage industry has been examined with a fine toothed comb by the media, regulators, consumers, and lenders alike. Well, it seems like they missed a spot.
With new regulations coming into effect and changing consumer needs, the industry will be forced to focus on the efficiency of origination processes this year, according to a recent American Banker article. Overall mortgage origination in the U.S. is predicted to drop by 36% this year, from $1.51 trillion to $967 billion. Refinancings, which are cheaper to originate than new loans, are predicted to fall from 69% of mortgage loans in 2010 to fewer than one-quarter of loans in 2012.
So what does all this mean? For mortgage lenders, it means they are improving efficiency through outsourcing work to accommodate demand fluctuation and upgrading IT systems.
But for those of us who are not mortgage lenders, there is also a lesson to be learned. Consumer demand is coming back, but what consumers are demanding now is not the same as what consumers demanded in the past. Banks, insurers, and investment managers will need to take many of the same measures as their colleagues in the mortgage industry. However, it’s also important to focus on more than just efficiency. Council research shows that companies can improve their responsiveness to changing customer demands AND improve efficiency by developing “principled agility.” Principled agility helps organizations grow revenue three times faster and improve efficiency by 16% more than their peers.
How can you join these industry leaders? There are two things that these organizations do better than their peers. First, make it easy to share and access information. Second, improve line level and collective decisionmaking. Read our full study to learn more about these strategies, which will enable you to respond to changing customer demand better than your peers.