Is a future mindset the key to attracting talent in mortgage lending?

As unemployment numbers fell throughout 2019, the existing war for talent intensified across financial institutions, putting banks and credit unions in a fight to fill positions critical to their mortgage operations. According to PwC’s 22nd Annual CEO survey, 76% of financial services executives cite talent shortages as a threat to growth.ⁱ

Unfortunately, too many banks and credit unions are relying on the same traditional methods of attracting and finding new talent, such as hiring from within (40%) and hiring away from competitors (25%).ⁱⁱ  As the talent war reaches critical proportions, a fresh perspective is needed, one focused on creating a future-focused organization.

Millennials and Gen Zers now account for 35% and 24% of the workforce, respectively,ⁱⁱⁱ  but those numbers are set to rise dramatically over the next five years as Baby Boomers and Generation X workers begin to retire in larger numbers. Future predictions indicate that Millennials and Gen Zers should comprise over 70% of the workforce by 2025.^iv  

To attract and retain talent in these two cohorts, it is important to understand a little about them. They watched the birth of the world-wide web or grew up in its aftermath. They are technologically savvy and cannot imagine performing a task manually that could be done in a fraction of the time using digital means.

As a result, 91% of the 1,600 Generation Z members surveyed by Dell say that the technology an organization uses influences their choice between similar employment offers, and 80% want to work with cutting-edge technology.^v 

Where Millennials are concerned, the fight for work-life balance is a top priority as many juggle family responsibilities with on-the-job demands. Nearly 60% report being swamped with work-day to-do lists, many requiring peripheral and manual tasks.^vi  The result is longer work hours and less time to take care of personal responsibilities.

Findings like these underscore the importance of future-proofing the financial institution when it comes to attracting and retaining loan officers and back-office mortgage talent. By creating a digitally centric environment, community banks and credit unions develop a workplace that is attractive to potential hires.

Strong digital competence also establishes an operating structure that is ready to seize the benefits of new technology applications as they emerge, ensuring greater hiring success as the workforce demographics change over the next few years.

Future-Ready Digital Strategies that Improve Hiring Odds

Eighty percent of generation Z believe that technology and automation will create a more equitable work environment.^vii  With process automation, human work is taken over by software applications, such as automated object recognition, optical character recognition (OCR), keystrokes and direct application integration. As a result, processes move from one task to the next in line with minimal human intervention.

Automation can be used to simplify many back-office functions from originations through servicing and compliance, by taking over tasks such as automatically verifying borrower information, ordering services like appraisals, updating key loan attributes and gathering reconciliation data. A study conducted by the New York Federal Reserve Board revealed that fintech lenders, using automation, are processing loans in 20% less time with 25% lower default rates.^viii 

Automation in mortgage lending benefits employees by removing tedious manual processes from workflows. In fact, a study conducted by Forbes revealed that 92% of organizations saw improvements in employee satisfaction after implementing automation initiatives.^ix

As financial institutions have begun to embrace automation, however, the focus has largely been on collecting data. As a result, banks and credit unions are in possession of reams of information with only manual tactics to review and make use of it.

Future-proofing the institution, by tying analytics and machine learning into automation solutions, turns data to insights, positioning the bank or credit union on the cutting edge of change. Often, these insights can be drawn from external information as well as the bank’s or credit union’s own world of data, expanding the universe of possibilities.

Finastra’s Fusion Mortgagebot, for example, analyzes over 30 points of data from more than 1,400 active users in conjunction with information gathered from the mortgage application process. The result is an information-rich report that allows banks and credit unions to rapidly compare their performance with that of other users. Insights like these accelerate the decision-making process, allowing organizations to gain a more competitive edge, an obvious bonus for any loan officer.

However, banks and credit unions should not forget the slimming effect of automation. Financial institutions will be able to do more with fewer employees as digital initiatives reduce the number of manual tasks. As a result, banks and credit unions can more effectively hire from within, utilizing the skillsets of existing employees in conjunction with digital enhancements to create a more dynamic and effective workforce.

In addition to streamlining everyday work, digital tools also improve communication and make it easier for community banks and credit unions to offer alternative work arrangements. It is an important consideration when it comes to attracting younger talent as Millennials and Gen Z generations place a high value on workplace flexibility, surpassing even employer-sponsored healthcare for many.^x

As community banks and credit unions engage in the war on talent, future-proofing the institution through the use of digital tools and capabilities becomes more than a way to attract and retain the best talent. Financial institutions also obtain a critical competitive edge.

_{i  “Financial Services Talent Trends 2019.” PwC, 2019. Web.
ii  Ibid.
iii  “Millennial Careers: 2020 Vision.” Manpower Group, 2016. Web.
iv  Peter Economy. “The (Millennial) Workplace of the Future Is Almost Here—These 3 Things Are About to Change Big Time.” Mansueto Ventures. Inc., Jan. 15, 2019. Web.
v  “Gen Z: The Future Has Arrived.” Dell Technologies, 2018. Web.
vi Doug Bonderud. “How Tech Supports Millennials’ Demand for Work-Life Balance.” BizTech, Sep. 25, 2019. Web.
vii  “Gen Z: The Future Has Arrived.” Dell Technologies, 2018. Web.
viii  Andreas Fuster, et. al. “The Role of Technology in Mortgage Lending.” Federal Reserve Bank of New York. Federal Reserve Bank of New York Staff Report No. 836, Feb. 2018. Web.
ix Chris Huff. “Worker Satisfaction Improves with Intelligent Automation and RPA.” Ziff Davis, LLC. HR Technologist, Aug. 7, 2019. Web.
x  Robin Madell. “Young Workers Want Work Flexibility Even More Than Health Insurance.” Flexjobs, Oct. 17, 2016. Web.}