Mortgage Industry Projections -- 2006 to 2008 -- May 23, 2006
Regardless of the source quoted, there are fundamental changes taking place within the mortgage industry. While some advocates profess a “soft landing” or “normalization of markets” others are predicting dire changes brought on by “irrational exuberance” and Fed policy actions. I’ve taken a more subtle and holistic viewpoint as I look into the crystal ball for the next 18 to 24 months (not in order of importance).
- Low costs and operational efficiencies are once again the norm of the day. “Elaborate” or enterprise solutions will not be in favor unless they have immediate returns or paybacks.
- Offshore or near shore back office and IT delivery will be rapidly increasing to over 50% of the aggregated business process functions in these compartmentalized areas.
- Compliance / regulatory issues and reporting will continue to be time consuming, costly, approached as “one-offs,” and misunderstood – multiple reasons.
- Adobe Intelligent PDF’s will be adopted and implemented over the objections of those promoting “vendor-free” industry standards (it’s been a red-herring).
- Acceleration of mortgage M&A events will be a result of loan losses, risk mitigation, and a need to drive top-line revenue while realizing lower costs of delivery.
- Increasing importance on customer service will be a key distinction providing individualized tailored service, multiple channel outlets, and lower transaction costs.
- Security, privacy, and advocacy will take a greater role not only within the IT functions but also in the front office to mitigate negative brand implications, customer defections, and as a “community” partner for niche based customer segments.
- Decrease in the importance of PR and ad agencies due to their inability to rapidly adapt to market conditions, their lack of depth, and the need for more tangible profitability as a result of less top-line revenue available.
- Increasing collaboration among vendors and channel partners to provide less solution fragmentation while reducing the time and cost to implement new systems and processes.
- An increasing emphasis on customer data integration (CDI) to prevent fraud, improve credit risks, and for secondary market considerations.
These are my projections looking into 2008. I think I’ll leave the doom and gloom to those pushing their own agendas and newspaper publications.
For 2008 MBA entries, click here