The Adoption of Financial Technology in the Mortgage Industry
With technology being integrated into our daily lives more and more, it was only a matter of time before financial technology began to take off. The use of smartphones for investing applications, cryptocurrency, and mobile banking are all examples of financial technologies that aim to make all these services available to the general public.
Figure 1: Five stages of technology: the blue line represents groups of consumers adopting new technology and yellow is the market share.
This graph is a representation of financial technology and when it is being adopted by the market.
Innovators (2.5%) – First to adopt new technologies
Early adopters (13.5%) – Adopt the new tech but it’s used to address their concrete problems
Early majority (34%) – Adopts new tech but must convince the majority of their company it’s worth it
Late majority (34%) – Similar to the early majority, except that they are risk-averse and uncertain about their ability to learn this new technology
Laggards (16%) – Tech averse and resistant to change, will usually fall behind the competition
*Percentages are rough estimates; these figures can sway between 1-5% depending on the industry and how well the technology functions within that specific industry.
As of March 2020, iSoftpull is in the early adopter’s phase. Soft credit checks have existed, but there wasn’t a method of delivery for that information. Within the last few years (around 3 years), soft pulls have exploded in popularity within the mortgage industry because of how much time and money they’re saving loan officers.
Generally speaking, the early adopters usually will reap the most rewards when it comes to who gets most of the technology (assuming the technology is actually beneficial and provides value). Since the majority of people are not using that piece of technology yet, they can use that technology as leverage over other companies that don’t have the said technology.
Soft pulls have been prevalent in the automotive industry, reason being that they need to know their customer's credit almost immediately upon request, though soft pulls are still WIDELY underused in the automotive industry. Other money lending industries have turned to soft pull technology to help them better qualify their leads and make sure that the leads that do come in are pre-qualified.
Our prediction of what the future will hold for financial technology within the mortgage industry:
A lot of loan officers and mortgage companies don’t even believe this technology exists or that it is accurate. They are often in shock when we show them this technology has been around for a few years now, it has just been used in other industries.
From the feedback we have received from different individuals and companies within the mortgage industry, we expect the use of soft pulls to become standard practice. What we mean by this is that after the early majority adopts this technology, soft pulls will become a standardized business practice for loan officers. It saves loan officers way too much time and money than if they don’t use the technology, because they will be able to see which leads are worth pursuing and they will be able to nurture qualified leads.
Want to know how you can be an early adopter? Click below to learn more or call (760) 579-6171 for an immediate connection to an in-office representative.