The mortgage industry is quickly realizing just how vital the online channel is to future growth. You could sense that from the near-standing-room-only crowd at the first-ever Digital Mortgage Conference, held last week in San Francisco.

Most, if not all, of the Canadian banks had representation at the event. Yours truly was also there, scribbling down insights from the top e-lenders in the game.

These were 10 of the top takeaways from the event:

1. Quicken Loans’ Rocket Mortgage is Blasting Off
   • In the first three quarters of this year, Rocket Mortgage (Quicken’s online-optimized lender) handled $5 billion in volume, making it a top-30 U.S. lender after just 11 months in business
   • Every 34 seconds someone creates a Rocket Mortgage account
   • Every 9 minutes someone completes a Rocket Mortgage application
   • Millennials are twice as likely to use Rocket Mortgage to buy a home as Quicken Loans clients 36 or older
   • The majority of clients who are using Rocket Mortgage are doing so on a mobile device
2. Forget everything you think you know when designing an online platform

   

   • Quicken felt someone should be able to get approved while standing in the home they want to buy
   • To make the process this fast and simple, Quicken mapped out every step of the mortgage customer experience and re-engineered it
   • “We failed many times” while trying different ideas, said Regis Hadiaris, Rocket Mortgage’s Product Lead
   • “Use user experience testing to break through your own ignorance,” he suggested
3. Build user confidence to improve conversions
   • Online mortgage lenders are new to most people. Many customers fear they’ll have to go it alone. An e-mortgage company’s job is to convince them they won’t have to.
   • When it comes to service, “The whole discussion of how digital is only non-human is misguided,” said Hadiaris
   • Rocket Mortgage provides the “same type of approval you can get from talking to a person on the telephone,” Hadiaris added. “Once people understand that, their concerns melt away.”
   • “Borrowers don’t expect any less personal support when transacting online,” Carter Kirks, Sr. Manager Consumer Finance Group, PwC, told the crowd
4. Cost efficiency is the future
   • “Acquiring customers as cheaply as possible is the fulcrum of competition,” said Biniam Gebre, Partner at Oliver Wyman
   • e-lenders “are winning that game,” he said
5. Top digital mortgage providers all have these things in common:
   • Simplified online applications
   • Intuitive selection of mortgage products
   • Instant rules-based conditional approvals
   • Continuous automated updates for clients
   • Easy-to-access human support, when needed
   • Electronic signing
6. Direct data ingestion is the killer app
   • The top online lenders are building ways to pull a client’s income, debts and assets directly from third-party sources for instant unconditional approvals
   • Most big U.S. lenders should have this functionality within a year and a half, says Gebre
   • Quicken already links up to 95% of U.S. financial services providers, making it the leader in automated document importing (Quicken uses e-verification firms like this)
   • For clients who decide to import their income and asset information, Rocket Mortgage cuts an average of eight days off the closing time for the loan
   • Competitive advantage in digital lending will centre on your architecture and “how well you can integrate” documentation sources, said John Harrell, VP Product Management at USAA
7. Online rate research is pervasive
   • Everyone except the “silent generation” (those age 73+) researches mortgage rates online nowadays, says Carter Kirks, Sr. Manager Consumer Finance Group, PwC
8. Some lenders are going full-auto
   • Rocket Mortgage clients can go start to end without talking to a person
   • ….”our goal is no customer interaction whatsoever…” with a goal “of closing online entirely,” said Vishal Garg, Founder and CEO of Better Mortgage, a Goldman Sachs backed e-lender
   • In time, 90% of the functions performed in manufacturing a mortgage will be machine driven, Garg predicts
   • He adds, “Most of our customer pain points are in the fulfillment of the transaction,” after approval
9. Competition will intensify for AAA borrowers
   • Insured mortgages “will become extraordinarily competitive…as players [enter] who don’t have legacy costs.” They’ll pass along their savings through lower rates
10. “Simple” is in high demand
    • Quicken doesn’t purport to have the lowest rates in the country, but its self-serve Rocket Mortgage option is so fast and simple that customers “put value in that,” says Hadiaris
    • J.D. Power rated the Rocket Mortgage’s intuitive user experience as significantly better than Quickens’ regular traditional service mortgage

    • Interestingly, no one but Better Mortgage’s CEO wanted to admit their technology is replacing loan officers, but that is exactly what is happening—albeit in small numbers thus far

For anyone interested in creating a more automated lending experience, the Digital Mortgage Conference is worth the trip. If nothing else, it’s a good reminder of how hard competitors are working to lure your customers online.