Yesterday we looked at Hello Home, CIBC’s new mobile mortgage app. That story touched on how and why CIBC built it.

Today we’ll examine what this technology means for the bank and for others in the mortgage business. Once again, we spoke with CIBC’s in-house tech sage, Aayaz Pira, VP of Digital Channels.

Here were his thoughts…

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On how realistic it is to expect full completed applications from a smartphone

• “…What we’ve done is streamline how many [fields] you have to fill out with your thumbs,” Pira says. “We’re grabbing a lot of the [required] information from the pictures of documents [clients are] sending to us.”
• Note: CIBC employees manually extract information from these photographed documents and enter it into the client’s database record to save the client time.
• “When we did our analysis…I think we said that out of the 6-8 documents you have to submit…they already have 75% of the information that’s required in a mortgage application. So why [ask]…people to duplicate that information? We should just grab that information from the documentation versus asking them to fill out a massive form.”
• “So we’re getting 75% of the information from the documents and we’re only asking for the 25% that we need in addition to that” (making the new phone app much more abbreviated than CIBC’s normal mortgage application).

On how long it takes to complete its smartphone application

• “…When we did our focus groups it took about 15 minutes end to end…if you had all your documents with you…”
• “But typically that’s not how people complete a mortgage application.”
• “We built in ‘save and resume’ because, if you need an employment letter (for example), you’re going to need to get that, and if you need your T4 from last year, you’ll need to find that.”
• “When we did our focus groups and client sessions…we didn’t see clients who wanted to sit there and do it end to end right away. There are logical steps. [People] wanted to come in and out of the app.”
• “Typically today, if you’re applying for a mortgage [by telephone] you have to listen to 20 minutes of [CIBC’s] terms and conditions and accept via the phone.” With the app, you simply read those terms and electronically consent, which can be a big time saver.

On what happens after submitting the application

• “You have a choice of when you want a callback from your mortgage specialist” for the next step.
• “You never have to see the person or go into a banking centre.”
• “We get your [ink] signature when you go in front of [your] lawyer.”

On whether there are security concerns about photographed documents

• “No, not at this point. Our legal and privacy team…have been supportive.”
• “Because we’ve developed a secure mechanism to fire the documents back to CIBC…we don’t see much risk.”
• Some lenders balk at photographed documents but fax or email is no safer. Fraudulent document altering “can be done by fax (or email) as well.”

On whether downloading a phone app is a hindrance

• “I think when clients find value in something that makes [a process] easy for them, I think they’re willing to download that.” (Here’s the Apple download link if you’re interested).
• “We’re adding a lot of incentives into it…The rate we’re offering in the mobile app is a better rate (at least 5 bps better) than you can get by just calling into the contact centre. We also waive some of the fees associated with the mortgage process as well.”

On why CIBC didn’t add Hello Home functionality to its existing banking app

• “Because we don’t know how this is going to work, quite honestly.”
• “We are convinced that this is the right step forward but I didn’t want to entirely disrupt the mobile banking roadmap that we’re currently working on.” (One example of that roadmap is the ability to open a deposit account by smartphone. Deposit gathering is “more core” to CIBC’s business than mortgages, at least as of today.)
• “If this becomes core to our business, we will definitely ingest it into our full mobile app.”
• “This was a way that we could put something out in an agile, quick-to-market way.”

On CIBC’s Dedicated e-Mortgage Specialists

• “We currently have a mortgage call centre…to initiate and adjudicate mortgages by telephone.”
• A subset of those call centre advisors have been assigned to take mortgage applications from the app.
• These are generally salaried CIBC employees versus commissioned salespeople (unlike CIBC’s 1,000+ mobile Mortgage Advisors).
• “They sit in our contact centre” and work set hours each day and send auto-responses after-hours.

On whether this will cannibalize CIBC’s other channels, including its 1,100+ branches

• “That’s not a concern [but] it’s always a topic of conversation…We have strong support from [management].”
• “We believe this [app] can be a companion for our Mobile Mortgage Advisors in the future,” who can use it to keep in touch with clients by chat, let them upload documents, send them status updates, etc.
• “We’re doing the same thing with our digital account opening capability for deposit accounts,” which is a “direct to consumer” technology.

On What’s Next

• “We have a bunch of capabilities and use cases we want to build into future phases, but we want clients to tell us what they actually want. We’re going to build as we go along, while getting real-time feedback from our clients.”
• “As we build future iterations we’ll start to automate more and more…reduce some of the overhead for our e-mortgage specialists and make it really easy for our clients.”
• “We did tinker with machine learning and deep learning through taking a picture [of a document] and then actually grabbing all the information and populating a database with that information…We’re not doing that today but that technology exists, we know how it works, we know we want to use it.”

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This Author’s Take

I hesitate to use the word watershed, but that’s likely what this technology is. And it’s not so much coding brilliance (as functional as it is, the app isn’t overflowing with novel spellbinding technology).

Rather, it’s the fact that a major Canadian bank ignored potential cannibalization of its existing channels (our words, not CIBC’s) by going direct to online consumers. That underlines, bolds and italicizes the importance of e-mortgage channels in 2016.

This little app will push Canadian borrowers further along the online mortgage adoption curve. As more early adopters arrange their mortgages online, we’ll start to see front-runners in this space emerge, right before demand surges in (perhaps) two to three years.

CIBC’s CEO Victor Dodig has clearly articulated that the bank wants to drive more customers through digital channels. And who can blame him? Automation and salaried employees (versus commissioned salespeople) will become a necessity for maintaining margins. As long as the bank provides a killer user experience and maintains high cross-sell, the future looks bright for CIBC’s e-mortgage channel—especially given its first mover status among the Big 6.

Over the last year the mortgage industry has awakened to innovations like the Rocket Mortgage. Hello Home is potentially another such landmark that lending historians will look back on when debating the question, “What triggered the acceleration in online mortgage originations?”