Industry Outlook

January 28, 2010

The Survivors Are Thinking Ahead Again

Perspectives By Stephen Margrett, CEO, The Turning Point Inc.

What is that strange sound? Could it be the mortgage industry awakening from its long slumber? Survival has surely been the watchword for the past two or more years: protect the bottom line, defend market share, etc. We always knew, however, that at some point we would have to start thinking ahead again. That moment has clearly arrived.

The survivors of the downturn are fewer and relatively stronger than before. They are engaged in a serious search for ways to take advantage of the diminished competitive base and to secure their future over the long term. Naturally one of the first places they are looking is to providers of cutting-edge technology solutions – and the good news is that, even during the downturn, some vendors have maintained their commitment to innovation.

Lenders want the classic benefits of technology, of course: enhanced efficiency, performance and profitability. But now, in addition, they need solutions that deliver regulatory compliance and management control.

Regulation is everywhere these days – and the requirements are becoming more complex and demanding all the time. On the marketing side of a mortgage company’s operations this means that management has to take a much more active role in ensuring their company’s brand and its products are correctly and compliantly represented in the marketplace. Communications with prospects, customers and even referral partners – whether driven by corporate or by individual loan originators – must be controlled, but without inhibiting genuine creativity and individual initiative.

The problem is that software offerings in the marketing space have typically been "LO-centric", providing their users with only a functionally unorganized and non-automated toolbox to help them perform specific tasks. Generally overlooked have been management’s needs for control, accountability and adherence to those increasingly stringent compliance demands. New solutions – that establish a controlled environment in which ingenuity and enterprise are able to flourish – are inevitably coming to the forefront.

These new solutions provide multiple levels of management control, for example:

Authorization: Marketing materials created by users at lower levels in the corporate hierarchy cannot be implemented until approved by relevant management.

Alert: A defined set of fields is monitored and changes reported via the management interface, enabling quick action to remedy departures from company policy.

Oversight: Users at higher levels in the corporate hierarchy can "impersonate" users at lower levels, giving management a window on the activities of Loan Officers.

Reporting: Real-time analysis of marketing results enables management to hold Loan Officers and other players in the process accountable for their performance.

Prohibition: Management can prevent different types of users from accessing a system function, or even an entire page, by means of a "permissions" capability.

During the past 10 years or so technology has delivered enormous improvements to mortgage operations – from origination, processing, closing, document preparation and so on, all the way through to servicing – increasing efficiency, reducing cost and mitigating risk. It’s taken a long time for this wave of technological advance to penetrate the bastions of traditional marketing, however, because the underlying architecture is very different from the technologies that drive transactional processes.

But how perfect the timing now is – especially since, coming in the form of outsourced SaaS applications, these new systems are quick and inexpensive to implement. In my view it will soon be inconceivable for a mortgage company not to have some form of intelligent marketing platform that efficiently identifies high-potential sales opportunities and automatically delivers relevant, compliant communications.

Stephen Margrett is CEO of The Turning Point Inc. The company’s flagship product is Mach3, a marketing/business opportunity engine. With a master’s degree in consumer behavior from the University of Minnesota, Mr. Margrett has been in the field of relationship marketing for more than 25 years. In 1986, he created Europe’s first full-service, data-driven marketing agency and managed it until the mid-1990s, when he moved to the United States.