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Perspectives Blog

As Lenders Digitize, Borrowers Still Want the "Human Touch"

October 30, 2017

Steve Deggendorf & Li-Ning HuangConsumers are coming to expect a simple, transparent, and pleasant experience in all of their transactions. Businesses are therefore increasingly leveraging digital channels to reduce errors and speed up transactions to deliver a better customer experience. In our prior quarterly Mortgage Lender Sentiment Survey® (MLSS), senior mortgage executives reported that investing in consumer-facing technologies is one of their top business priorities in 2017 to remain competitive.

With the explosion of digital services and the increased importance placed on customer service, we also surveyed senior mortgage executives through the MLSS about their customer service channel strategies and their views regarding digital and person-to-person channels. Additionally, we surveyed consumers who took on mortgages in 2016 ("recent mortgage borrowers") through our National Housing Survey® about their channel usage and preferences when communicating with lenders. A comparison between lenders' and consumers' views suggests that lenders who are rolling out an omni-channel customer service strategy might over-emphasize the digital experience at the expense of the "human" connections that consumers continue to desire.

The MLSS results show that lenders use a mix of person-to-person (phone and local branch/office) and digital (company website, mobile app, email, and social media) channels for customer service, rather than just one type. Most believe that their omni-channel customer service strategy is strong and rate their firms quite successful at delivering customer care.

However, in terms of communication channel usage and preferences, our survey results demonstrate that lenders' evolving channel focus might not be well-aligned with consumer preferences. When asked to identify the channel most often used by their customers, lenders cited telephone and email as the most popular channel (44 percent and 42 percent, respectively). Only 13 percent of lenders cited local branches or offices. In contrast, for recent mortgage borrowers, in-person communication was rated similarly as the online or phone channel.

Forms of Communication Between Lenders and Borrowers

When asked about the future role of person-to-person (P2P) communication (via phone or in-person channels), about half of lenders said that P2P communication will be equally important as it is today, but nearly 40 percent of lenders expect it to be less important. In startling contrast, 90 percent of recent mortgage borrowers indicated that they would like to use P2P channels in the future when communicating with their lenders.

Future Communications Between Lenders and Borrowers


Companies like Amazon have transformed the retail marketplace using digital channels to provide a superior customer experience. Amazon's compelling success in the retail environment may lead some mortgage lenders to believe that the role of P2P communication will diminish. The recent case of Best Buy1 proves that P2P strategy still matters – Best Buy was able to rebound by revamping their strategy to emphasize the P2P channel. They retrained their in-store employees to be knowledgeable and consultative, allowing them to engage shoppers. Best Buy also started an advisor program that allows customers to get free in-home consultations about what electronics or appliances to buy and how they should be installed.

The mortgage process is a complicated one, prompting the need for a "consultative" style of service. We found in our recent study that consumers use both personal and online information sources when shopping for a mortgage; but when asked about the most "influential" source of information, consumers say industry professionals who offer a personal touch (mortgage lenders and real estate agents) win by a wide margin over online sources. This result was consistent even among Millennials. Therefore, while mortgage lenders build an omni-channel customer experience, we believe it’s important that they continue to focus on the human touch to engage consumers effectively.

To learn more, read our Mortgage Lender Sentiment Survey Special Topic Report, "Consumers Still Value the Human Touch."

Steve Deggendorf & Li-Ning Huang
Market Insights Research, Economic and Strategic Research Group

October 30, 2017

Opinions, analyses, estimates, forecasts and other views reflected in this commentary should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Changes in the assumptions or the information underlying these views could produce materially different results.

[1] Roose, Kevin.  (2017, Sep. 18). Best Buy’s Secrets for Thriving in the Amazon Age. The New York Times, retrieved from