The Expert View: Building Customer Loyalty in Mortgage Lending

 

Moving beyond price competition and operational efficiency to build long-term customer relationships is the key challenge faced by mortgage lenders, Ben Ussher-Stanley, Regional Vice President at nCino, told senior mortgage executives at a Business Reporter breakfast at the Goring Hotel, London.

 

While mortgage lending has long been dominated by cost competition and regulatory constraints, the arrival of artificial intelligence (AI) promises to be the sector’s most profound technological shift since the move to the cloud. For many lenders, the question is not whether to adapt, but what to prioritise and how quickly to move.

 

Familiar pressures, new dynamics

Attendees agreed that lenders’ core challenges have remained remarkably consistent: price, competition, and process. Securing equity and debt funding remains a pressing concern, along with reducing cost. What has changed is the influence of technology, which allows large banks to drive down operating costs while giving smaller challengers the tools to expand into new markets. Both dynamics intensify competition in an already fragmented marketplace.

 

Mortgage lending also faces a loyalty problem. Unlike current accounts or credit cards, a mortgage offers little ongoing engagement with the lender. Many customers arrange their mortgage via a broker, limiting direct contact even at the outset. As a result, borrowers tend to be highly price sensitive and rarely develop a meaningful attachment to their lender. Without regular use or interaction, there are fewer opportunities to build trust or demonstrate value.

 

As one participant noted, “mortgage customers don’t want to interact.” That makes loyalty difficult to earn unless lenders can offer more, such as portfolio management tools for buy-to-let investors. But those solutions must be grounded in real needs. An augmented reality app that estimated renovation values, for instance, fell flat with landlords who already had sufficient expertise to make those judgments themselves.

 

The role of technology in building trust

Technology may be the key to transforming transactional mortgage relationships into lasting ones. Data-driven tools allow lenders to understand customers better, streamline processes, and personalise offers. Underwriters, for example, can increase throughput from two or three cases to as many as 20 a day by using AI tools to helps with things like making first-pass assessments. Digital platforms like nCino enable multiple parties to share documents seamlessly, cutting down the time taken to complete mortgages.

 

Self-service portals could allow customers to view and accept renewal offers with a click, while analytics might be used not only to identify risky borrowers but also to flag promising ones, which makes it possible to offer tailored finance to customers whose affordability could be growing. AI-driven email triage is already helping some lenders respond faster to enquiries, providing key product details without manual intervention.

 

For younger, digital-native customers, these services are increasingly expected. Apps, rather than bank managers, are now the front end of the relationship. At the same time, personalisation will grow in importance as customers’ financial needs become more complex with age. Striking the right balance between digital convenience and expert human advice will be essential to earning loyalty in a crowded market.

 

Big banks, small banks, and legacy hurdles

Large incumbents enjoy significant cost advantages: cheaper capital, cheaper funding, and lower operational costs through scale. One attendee, from a smaller lender, said this made it increasingly difficult to compete with them.

 

However, the bigger providers have their own challenges, particularly in dealing with legacy IT. “Some of our systems are older than me,” admitted one big-bank executive. Decades of bespoke, interlocking systems make wholesale upgrades prohibitively expensive, while incremental fixes are slow and risky. Such constraints limit the ability to deploy modern features, from APIs to cloud services.

 

Smaller challengers, by contrast, can be nimbler, adopting the latest digital platforms without the burden of technical debt. But they face their own challenges in securing funding and competing against the established reputations of household names.

 

Moving forward with focus

If digitalisation projects often fail, it is not because of a lack of ambition but because scope grows unmanageable. “It’s easy to end up trying to boil the ocean,” warned Ussher-Stanley. His advice: start small, with a solution that solves a real problem and delivers immediate value, while laying the foundation for broader transformation.

 

Just as importantly, poor processes should not be digitised; technology is an opportunity to rethink how work is done, not simply to automate it.

 

In closing, Ussher-Stanley highlighted a challenge that goes beyond customer loyalty: employee loyalty. “A younger generation coming into the workplace expect to work with the latest technology,” he noted. “If they find that the technology is out of date, it may be hard to keep their loyalty.”

 

For lenders, investing in modern systems is not just about efficiency or compliance. It is about attracting both customers and talent in a market where choice is abundant, loyalty is fragile, and the future will be defined by those who adapt.

 

Learn how nCino can help you create a best-in-class mortgage lending experience that enhances both customer loyalty and your competitive advantage.