Mortgage Marketing Challenges and Opportunities for Banks

This article delves into banks’ challenges and opportunities when marketing their mortgage products. Banks have much to gain from marketing their mortgages, including revenue generation, brand awareness, increased customer base, cross-selling opportunities, and support for the housing market. However, there are also several challenges that banks must overcome to succeed in this space, including the complex and technical nature of mortgages, low differentiation, high competition, lengthy sales cycles, and regulatory requirements.

To succeed in mortgage marketing, banks must develop a solid online presence, leverage data analytics, partner with real estate professionals, offer competitive rates and terms, and provide exceptional customer service. By doing so, banks can become power mortgage marketers and compete effectively in the crowded marketplace.

Revenue Generation

This one seems obvious, but some banks focus on origination costs and overhead instead of revenue when considering scaling their mortgage business. Marketing mortgages can be a significant source of revenue for banks. Mortgages are typically long-term loans that generate interest payments for the duration of the loan. By effectively marketing mortgages, banks can attract customers and generate more revenue through interest payments.

Building Brand Awareness

As a sticky product and a long-term relationship commitment, mortgages offer banks the opportunity for the long brand awareness play when marketing to prospective borrowers. Marketing mortgages can also help banks build their brand and increase awareness of their services. When customers see a bank’s advertisements for mortgages, they become more familiar with the bank’s name and reputation, which can lead to increased trust and loyalty.

Increase Customer Base

By marketing mortgages, banks can attract new customers who may not have considered the bank’s services. Customers in the mortgage market may be more likely to choose a bank with a strong reputation and competitive interest rates and terms.

Promote Cross-Selling

Marketing mortgages can also allow banks to cross-sell other financial products and services to customers. For example, a customer who takes out a mortgage may also be interested in opening a checking account, obtaining a credit card, or investing in a retirement account.

Support the Housing Market

The mortgage market is vital in supporting the housing market, an essential part of the economy. By marketing mortgages and financing home purchases, banks can help support the housing market and contribute to economic growth.

Complex and Technical Nature

Mortgages are complex financial products that involve a lot of technical details and jargon, making them difficult to understand and explain to the average customer.

Technology Assist: Investing in engagement and education for bank mortgage marketing can seem daunting, but end-to-end mortgage marketing tools simplify the process. Typically the tools needed for this process are:

• A mortgage-focused CRM
• A mortgage marketing automation platform
• A mortgage marketing compliance system for content management
• A practical mortgage content library

Low Differentiation

From a customer’s perspective, mortgages are very similar from one bank to another. This means that it can be challenging for banks to differentiate themselves in a crowded marketplace, making it hard to stand out and attract customers.

Technology Assist: Differentiation means having a configurable and effective communication platform available to mortgage marketers. To stand out, omnichannel marketing through email, phone, text, video, and social media must be considered. Banks have traditionally been slower to adopt these additional communication channels because they have less control over messaging, so a compliance-ready platform is critical.

High Competition

Mortgages are a highly competitive market, with many banks and other financial institutions offering similar products. This can make it difficult for banks to gain market share and attract new customers.

Technology Assist: Competitors range from fintech companies to individual brokers that can be agile and adaptive to market and marketing changes. These include reaching potential borrowers where they are via all communication methods. For example, during the COVID-19 pandemic, many banks had to close branches that served as key lead generation hubs through normal banking activity. This meant competition for digital leads was even more challenging, and tools to take advantage of more remote workers and less foot traffic became critical. Speed to lead became more critical for mortgages, and a mortgage CRM with automation moved from a nice-to-have to a requirement in the space.

Lengthy Sales Cycle

Selling a mortgage can be lengthy and time-consuming, involving multiple steps and customer interactions. This can make it challenging for banks to allocate resources and manage their sales pipelines efficiently.

Technology Assist: Loan officers need the help of a comprehensive mortgage marketing automation platform that can integrate Point of Sale (POS) and Loan Origination Systems (LOS) to communicate through the lengthy sales cycle.

Regulatory Requirements

The mortgage industry is heavily regulated, with many rules and requirements that banks must comply with. This can add a layer of complexity to the marketing process, requiring banks to be diligent in their compliance efforts and navigate a complex legal landscape.

Technology Assist: While all aspects of mortgage and banking have regulatory requirements, mortgage marketing also marries those with general marketing regulations. Mortgage marketing compliance tools must achieve compliance goals such as providing appropriate disclosures and limited access to unapproved content to loan officers.

Banks can become power mortgage marketers with the right team, products, and technology. As banks compete for a share of the mortgage market, it is essential to have a solid plan to reach potential customers and demonstrate the value of the bank’s mortgage offerings. Here is a strategic outline for competing in the space:

Develop a solid online presence.

In today’s digital age, having a solid online presence is crucial. A bank’s website should be optimized for search engines, easy to navigate, and provide valuable information about mortgage options. Additionally, banks can use social media and digital advertising to reach potential customers.

Leverage Data Analytics

Data analytics can provide valuable insights into customer behavior and preferences. Banks can use this information to personalize marketing efforts and offer targeted promotions to potential customers. Either use the campaign analysis tools in your mortgage CRM or drive decisions through a mortgage-specific business intelligence platform.

Partner with Real Estate Professionals

Real estate agents and brokers are a valuable source of referrals for mortgage lenders. Banks can build relationships with these professionals by offering educational resources, co-marketing opportunities, and other incentives such as single property sites and flyers.

Offer Competitive Rates and Terms

Mortgage rates and terms are significant factors in a borrower’s decision-making process. Banks should stay competitive by offering attractive rates and terms and be transparent about fees and costs.

Provide Exceptional Customer Service

Experience matters in mortgage marketing! Good customer service is essential in building customer loyalty and referrals. Banks should be responsive to inquiries and provide clear and timely communication throughout the mortgage process.

In conclusion, banks have much to gain from marketing their mortgage products, including revenue generation, brand awareness, increased customer base, cross-selling opportunities, and support for the housing market. However, there are several challenges to overcome, including the complex and technical nature of mortgages, low differentiation, high competition, lengthy sales cycles, and regulatory requirements.

To succeed in mortgage marketing, banks must develop a solid online presence, leverage data analytics, partner with real estate professionals, offer competitive rates and terms, and provide exceptional customer service. By doing so, banks can become power mortgage marketers and compete effectively in the crowded marketplace. Start creating your successful mortgage marketing plan today!