In 2017 Quicken Loans passed Wells Fargo (NYSE: WFC) to become the highest volume mortgage-lender. As the two firms continue to compete for the top spot, the difference between them is apparent.
Wells Fargo is a traditional bank established in 1852 and today it has more than 8,000 branches. Quicken Loans dates only to 1985 and operates no branches. Even though Quicken Loans have no branches they were able to surge ahead of traditional competitors and their long-established customer relationships. This is because of their Rocket Mortgage operation which helped them in making a complex, intimidating process very simple. By using Rocket Mortgage Operation they were able to create an effortless customer experience.
Rocket Mortgage uses the slogan, “Push-button. Get Mortgage”. They claim a customer can get approved in as little as eight minutes, whereby in traditional banking a customer will have to wait for a long period of time just to speak to the manager of the branch. Technology is the key part of making the process of Quicken simple and fast. They introduced online applications earlier than many other competitors, they were among the first to have a mobile app that lets customers apply for a mortgage on their own mobile phone. They further reduce effort by importing data and pre-filling forms whenever possible.
Quicken founder Dan Gilbert said that there is not that much difference between mortgages offered by them and others, but there is a difference in how that mortgage is delivered and the experience to the customer. Mobile apps, computer screens, and call centers might generate high volume but diminish the customer experience.
But customers would always prefer getting the work done in very less time rather than waiting for a long period of time for the experience. For ten years, Quicken loans have topped the J.D. Powers customer satisfaction survey for mortgage origination. Customers aren’t looking for delight or any pleasant surprise, they just want to get through a confusing, time-consuming process as quickly and easily as possible.
This is why fintech firms that make good use of technology to make the customer service easy and simple are going ahead of traditional firms that make a customer spent a lot of time to go through their processes. In recent years banks have improved their digital offerings, but many still lag behind their fintech counterparts.
UK-based user experience expert Peter Ramsey opened accounts at different financial firms. He found that fintech firms on average make opening an account easier than traditional firms. Ramsey says “Every company, regardless of sector, should be obsessed with friction. It’s simple really: reducing it makes things easier and having unnecessary friction makes things harder.” In this era combining a trusted brand with a minimum-friction process will fend off digital start-ups and steal market share from slow-moving traditional competitors.
