MortgageFlex Embraces CIF Business Philosophy
By Lester
Dominick
6/12/06
Lending institutions must enhance
one-on-one client relationships.
As
new business is harder to find and existing customers more important to retain,
the philosophy of a Customer Information File (CIF) becomes more critical to
success.
Within
the mortgage industry, many lending institutions have a diverse customer base
spread over a wide geographical area.
In an effort to broaden the spectrum of their client services and consolidate
consumer data, these institutions are realizing the importance of a CIF.
The
CIF serves as a customer profiler and enables a firm to evaluate its
clients’ product and service needs.
The file contains all relevant information about a firm’s customers
including:
·
demographic
data,
·
response
to a firm’s decisions, and
·
purchase
history
A
CIF provides lenders with the capabilities to measure and evaluate its customer
assets, mining formerly hidden opportunities.
But
this increased customer orientation could not have been possible without new
advances in software, advances which allow for a much smoother and more
streamlined process, end-to-end.
A
fully integrated mortgage lending system handles origination, secondary
marketing and servicing on a single platform, utilizing a CIF. This allows for the seamless sharing of
information and creates retention and marketing opportunities for loan
originators, servicing personnel and marketing analysts.
Let
me give you an example. If a borrower requested loan payoff information from
the servicing system, a lead could automatically be passed to a loan
originator. That originator would have access to the current account and
customer contact information from the CIF. They could then contact the customer
to offer assistance on any potential new transaction related to the payoff
request.
The
use of Microsoft’s .Net Framework 2.0 and a Service-oriented Architecture
(SOA) makes this all possible. We have synchronized all our LoanQuest products
to work seamlessly with their CIF philosophy. This allows users of any of their
products to have shared access to the most current customer account and contact
information.
Creating a central CIF
The
integrated platform approach is the best architecture to support a customer
centric philosophy like CIF. The .NET platform enables creation of a central
CIF that can populate end-to-end. The traditional mortgage lending approach has
been to have separate systems and data silos for each major application. In the aforementioned scenario, a
potential sales opportunity would probably be lost due to a lack of access to
shared current information and notification.
The
rise of the CIF approach in business correlates to increasing interest in
Customer Resource Management (CRM).
As companies continue to make technological advances, a significant need
has arisen for stronger relationship management. Lending institutions have
realized that it is a necessity to enhance one-on-one client relationships and
develop highly targeted CRM campaigns.
In
many ways, proper strategic CRM activities are a result of a well-designed
CIF.
Companies
base their product planning on customer information and changing business
demands. This approach shifts the company’s focus from the product to the
consumer as its source of revenue and wealth generation. As more organizations
implement CIF into strategic planning, customer management is replacing the
current structure of accounting profit and loss by product. By capturing client
information throughout the loan process and storing it in a single, searchable
database, lenders can prospect at will, utilizing a virtually untapped
resource.
Corporate
profitability, too, becomes based on a per-customer ratio rather than a per-product
ratio. Long-term profitability is calculated on a customer’s lifetime value, which is the amount of
profit that can be attained over a given customer’s “life.”
A two-strategy approach
Two
strategies designed for long-term profitability that incorporate the CIF asset
are:
·
Capture
the Customer, and
·
Event-oriented
Prospecting.
The
first, Capture the Customer, also known as relationship management, focuses on
maximizing the customer’s account.
The firm analyzes prior company interactions with the customer to
influence future transactions. The
objective of this strategy is to increase a consumer’s value to the firm
by making the firm more valuable to the consumer. In order for this strategic approach to
be constructive and beneficial to both parties, an open and continual line of
communication between company and customer needs to exist.
By
concentrating on a CIF, clients will be able to increase their revenue base by
providing a more cost-effective, efficient and simplified system for the
end-user.
As
institutions, such as insurance companies, and other financial services
companies move into the mortgage business, they are taking with them their
client base. These new players are
using their existing customers to compete in the industry. With companies diversifying, customers
find it more attractive to remain loyal to their originating institution. Having their customer information
contained in a single file allows for more simplified application processes.
This streamlined way of doing business creates a more efficient course of
interaction between corporate and customer.
The
customer, in turn, values his relationship with the company and is less likely
to take his business to another institution. Technology vendors have to offer their
financial services customers the ability to compete with these up-and-coming
firms and still maintain their existing client base.
Relationships not products
Competitive
advantage in businesses is beginning to be seen in terms of who has the special
client relationships as opposed to the “best” product. Viewing the customer as the “new
asset” creates a shift in organizational structure and performance
measures from a product standpoint to alignment with the customer.
Focusing
on the customer as an asset broadens the company’s relationship marketing
by increasing the communication flow between client and firm. This interaction allows the company to
obtain more information about their client needs, which can be utilized in
decisions regarding product enhancements.
There
is a constant effort on the corporation’s part to access and maintain
continuous information regarding individual client value. This process aids in streamlining
decisions to develop better marketing strategies that are tailored to a
particular client’s needs.
____________________________________________________________________________
Lester Dominick is president and CEO
of MortgageFlex. He founded the company in 1980 to specialize in the mortgage
banking industry and has served as president since inception.