There’s a digital revolution underway in mortgages, and more people realize it every day.
But some believe that stodgy old banks are behind the Internet curve. They claim that big banks are slow to adapt, that they steer more like a supertanker than a speedboat and that banks would rather shelter their precious branch networks from the margin threat of online channels.
Well, times are changing, my friends. When CIBC launched its mortgage app two weeks ago, it put the mortgage industry on notice that technological competition is en route, and it’s coming hard and fast.
Named “Hello Home,” CIBC’s new app is something you might expect from a nimble fintech startup. For a bank, it’s definitely counter-convention.
Before we go any further, let’s review what the app does. In brief, it lets borrowers:
- Have a dedicated mortgage specialist assigned to them through the app
- Message that specialist anytime with questions
- Negotiate their mortgage rate with that specialist through chat, without ever speaking to them
- Submit a streamlined mortgage application on their smartphone
- Save and resume that application
- Apply with a co-applicant, who can use their own smartphone
- Take photos of all documents
- Securely upload those documents to CIBC
- Electronically agree to CIBC’s terms (no scanning or faxing a signature)
- Get a special discounted mortgage rate.
We’ve seen some of this technology on broker and lender websites before, but not from a major Canadian bank, not in this slick of a package and not on a smartphone.
I spoke with CIBC’s VP of Digital Channels, Aayaz Pira, for the inside take on this important launch. Here’s what he shared…
On What Prompted the App
- “We get an incredible amount of traffic to our mortgage pages on cibc.com,” Pira said.
- “What we used to do was use those as leads for our Mortgage Advisors.”
- Management felt it important to let people who “self-initiate” the mortgage process, and who didn’t want to visit a branch, continue the mortgage sale online.
- “Our executives visited a few banks in Europe and observed [how those banks were using] digital platforms to support the mortgage process.”
- In particular, “Allied Irish Banks was doing something interesting with mortgages and that’s where some of our inspiration came from.”
- “We wanted our [online platform] to be mobile first because we know…growth of mobile in our client base is exploding…[The customer’s] phone is in their pocket at all times, so why not make use of that?”
- More than 80% of people use mobile phones in their home-buying journey, Pira added.
- “Outside of mortgages, more than 85% of bill pays and transfers are already done digitally.”
- “We know that clients who use our digital channel are happier clients and have deeper relationships with our bank.” (In addition to having a higher NPS, or net promoter score.)
- Pulling all that together, we ran a six-week sprint to re-imagine the home-buying experience of our clients.”
- Aayaz’s team developed a proof of concept and showed it to the bank’s executives. The mortgage team said, “This is amazing. We should definitely do something with this.”
- “Once we got the executive buy-in and the sponsorship from the mortgage product team, we sent 10 people or more, a cross-functional team, into our lab and said, ‘You guys are going to stay here for the next three months and just build it. So we had developers, designers, product people, strategists…all co-located in a room, just bringing this to life.“
On what frictions exist in today’s mortgage processes
- Pira cited three key frictions that CIBC wanted to overcome:
- “The amount of paper.”
- “Knowing where you are in the [mortgage] journey.”
- “Having to go into a branch or banking centre…When you start the mortgage process, you speak to somebody or you go into a banking centre and there’s so much back and forth.”
On the App’s First Iteration
- “The product we put out to market is…a minimum viable product.”
- “We brought this to life in about four months.”
- “It’s not [yet] the full set of use cases that we have imagined.”
- The app was launched on the iPhone. An Android version is coming soon.
- “What we’ve done is put a really beautiful and sexy digital front end on a [workflow] process that exists [already].”
On Some of the App’s Capabilities
- “The mortgage process is obviously complex so having a human being…you can chat with is really important. So, in-app chat is a core feature—being able to speak to a mortgage advisor who is dedicated to you.”
- The document imager is one of the coolest features. “What we’re doing…is using a camera to snap a picture [of a document] and securely send it over to the mortgage specialist.”
- Keeping clients up to date is also vital. “What we’ve tried to do is show you that, these are the five steps. This is where you are in each of the steps. There are notifications and messaging back and forth to let you know when a step is completed, what the next step looks like, and when you can expect to have something back from the mortgage specialist.”
This rundown gives you a sense for the what and why behind CIBC’s new app. Tomorrow we’ll look at how it could change the bank’s business, some potential areas of concern and what this might mean for the rest of the mortgage industry.
If you want to learn more in the meantime, CIBC and Scott McGillivray are showcasing the app at 7 p.m. May 31 on Facebook.
Very interesting post. This really underlines the future of this business. While some clients will want personal meetings forever and some clients may want them for years to come; gradually those clients will die off or convert their own habits to be more tech friendly. This process is clearly unfolding right now and the banks are becoming resolved to it. If we are to survive marketing “A” mortgages, we as brokers need to think hard about what technology we will have to use to stay up to date.
Agreed Ron. This will (should) have a lot of competitors re-evaluating their desktop and mobile user experiences.