TECH ROI LAGGING

TECH ROI LAGGING

– Lew Sichelman

As a follow up to previous columns, the Stratmor Group says that while lenders have been buying and installing the latest technology “at a record pace,” they are not yet getting the biggest bang for their bucks.

In 2016, retail lenders spent less than $400 per loan on technology, the Greenwood Village, Col.-based advisory firm says. But that figure just about doubled in the first half of 2020.

“Lenders ramped up with more people and pushed harder on technology, buying and installing at a maddening pace,” says Senior Partner Garth Graham in the company’s latest Insight Report.

But while they are spending big money, they’re not yet achieving max dinero in return, according to Graham, who noted that only about half the eligible users are adopting the tech tools pushed their way. “Lenders are rushing to deploy the tools,” he says. “They are spending money on technology but are struggling in terms of adoption.”

One of the top technologies added by lenders last year was to support electronic closings. But eClosings failed to advance in the way many expected. “Instead, we saw hybrid eClosings experience the highest gains,” Graham reports. Hybrids, which the Stratmor exec claims “is a safer process and offers a substantially improved experience for the consumer,” increased by 25 percent.

Part of the slow implementation rate has to do with getting the new tools installed, configured and ready to go. But the biggest roadblock is people. “Good technology implemented well is the goal,” Graham says. “But lenders must focus on the humans in the equation because they will account for 90 percent of the cost.”