Market challenges have evolved in the last decade, making businesses apprehensive about adopting new tools. However, frontline managers are quickly realizing the power of big data and analytics to improve their decision making and to drive more profits. The mortgage industry is witnessing a wave of optimism. To drive this wave and to ensure your gains are not short term, you need to get smarter by using data. But what is this data and how can you use it?
First, Get Your Big Data Perception Right
For a long time, businesses argued the usefulness of collating consumer and organizational data. Some CEOs invested in a very basic data infrastructure while others hoarded all sorts of data. However, both these approaches are flawed.
Big data isn’t about how much data you own. It is about how you use this data. It is not about volumes, but about the quantity of data that can actually be mined to give useful results. Rather than thinking about how to become more data centric, lending businesses should worry about how to become smarter data handlers. Big data is relevant to nearly every mortgage business. It helps in better customer segmentation, comprehensive inventory management, and understanding consumer behavior. It is wrong to think that big data is applicable to leading brands like Google or Amazon only. Data analysis doesn’t necessarily mean investing millions of dollars. When used for extracting meaningful information from well organized data sets, analytics can be handled by small teams too.
Use Big Data for Better and Not More Solutions
Big data might not immediately widen your customer reach. However, it can help you discover more lending channels within the current borrowing landscape. There is much more information than credit card history, which can help lending businesses identify consumers with loan-worthy profiles. Such consumers are often ideal for smaller loans. Most mortgage lenders find it difficult to sustain consumer faith. This brings down volumes acquired through positive references and social networking. Big data and analytics make it feasible to identify best practices for promoting customer loyalty across different channels. This includes maintaining brand penetration through social media.
Use Big Data to Optimize Business Models and Not Change Them
Business models need to evolve to maintain relevancy and profitability. This is perhaps most suitable to the mortgage niche. The pre & post recessionary market trends have established one fact—if you are a mortgage business and unwilling to adapt, get ready to be uprooted.
Here the use of data is to improve the business model. Don’t think of it as data being revolutionary. The basics of lending industry will remain the same. However, some processes need to be changed. Think of it as a transformation towards more efficiency. Internal data can be used for maximizing employee productivity. External data can be used to ascertain how your frontline managers are performing when trying to convert serious queries into customers. Data analysis ensures that you can optimize towards developing a cheaper and more practical business models.
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