by Phil Hall Wed, September 03, 2014
Nowadays, it seems like there is an app for every possible activity and interest—which makes sense, considering the obsessive nature that many people devote to their mobile devices.
"Take a look around you next time you are at the airport, in line at a coffee shop or out to dinner with the family," said Michael Kelleher, co-founder and executive vice president of Swampscott, Mass.-based EasyMortgageApps. "Tell me, how many people you see using their mobile devices? Simply put, our world is in the midst of paradigm shift. For the first time, more people are accessing the Internet via their mobile device than their desktop."
But creating mobile apps for the sake of creating mobile apps makes little sense, especially in the mortgage space. When Mat Ishbia, president and CEO of Troy, Mich.-based United Shore Financial Services (USFS), wanted to offer an app for the brokers working with his company’s United Wholesale Mortgage (UWM) subsidiary, he insisted that it serve a practical purpose.
"We wanted to make sure had the benefits and usefulness for them," said Ishbia. "We are not marketing it as 'Hey, we have an app!'"
And that is the primary challenge for today’s mortgage industry-related apps: Creating a user-friendly high-tech solution that serves an important business role.
However, it is important to stress that apps are not a replacement for other communications channels.
"Clients want to be communicated with by the medium that speaks most clearly to them," said Jeff Miller, director of systems integration at Directors Mortgage, headquartered in Lake Oswego, Ore. "Some would prefer a phone call, while others prefer a package of papers in the mail, and others want badge alerts and text messages. A good mortgage company will never try to communicate via only one channel, but make them all excellent and allow the client to choose what works best for them."
Planet of the apps
The evolution of the app-related technology is relatively recent. Eric Robichaud, CEO of 401 Consulting, a Woonsocket, R.I.-based developer of apps and Web sites, noted that the past four to five years have seen a dramatic improvement in this area.
Within the mortgage space, app development is aimed at the distinctive communications needs of real estate professionals. When UWM launched its app for brokers in February, it queried its clients to determine what functions would be necessary for the app to be widely used. As a result of these conversations, UWM’s mobile app can allow brokers to access rates, manage pipelines, view borrower and loan details, check the real-time status of transactions, receive alerts, manage conditions and lock loans.
"No other wholesale leaders can do that," said Ishbia. "We wanted to make our app interactive."
When Columbia, Md.-based IndiSoft LLC was planning the creation of its apps, it also queried potential users on which functions would be desired and which would be impractical.
"For an app to be good, we need to know what practicality the app will have in the users' hands," said Sanjeev Dahiwadkar, president and CEO of IndiSoft. "If there is no benefit, it won't be used. There was no way that a person would use a smartphone and look at compliance papers. For the mobile platform on our valuation module, however, users are able to capture photos of property, make notes and observations, and enter data while in field. This helps speed up the process of doing work."
"A superior app offers connectivity and loan transparency complimented by a technology which offers an automated solution to integrate directly with either a company's loan origination or CRM software,” said Kelleher. "The resulting superior app offers real-time updates in a mobile format complete with automated push notifications updating all relevant parties when there is a change to loan status. Our loan ecosystem is truly unique engaging the borrower, real estate broker, loan officer and title agent."
Before you get started
For mortgage companies that want their own app, a thorny question involves whether to create the app in-house or to outsource the project. For Directors Mortgage’s Miller, the answer depends on a variety of circumstances.
"The advantages of developing an app in-house allows you to make what you want and how you want it,” Miller said. “Control of design and functionality is within your realm and not handed over to an out-of-the-box product that just has your logo and colors. You will not stand out from the crowd with an app that looks like everyone else’s."
But on the other hand, Miller continued, was the question of whether the company has the right team in place to create this type of a product.
"The trouble with in-house design and build-out is you need the expertise to do it,” said Miller. “And to staff for this kind of skill is expensive. So, the reality is most mortgage shops cannot afford to do this well. The best third-party to work with is one who has proven experience and can deliver the product, can make changes easily and customize the software and app to meet the needs of individual customers, yet at the same time support it moving forward."
Robichaud pointed out that this type of project is not for companies that prefer to accomplish endeavors quickly and cheaply.
"There are significant costs to developing native apps," Robichaud said. “First, most people don't realize that each smartphone platform—iPhone, Windows Phone, Android, Blackberry—uses a different set of technologies, programming languages and development tools. Developing native apps often means re-coding the same app multiple times from scratch for each distinct platform. Making updates is neither fast nor trivial."
Robichaud added that app development will also require a marketing push to raise awareness of the app’s existence.
"Above and beyond all of this, consider too that an app must be downloaded and installed," Robichaud said. "So mortgage companies have the added hurdle of getting customers and prospects to proactively go and download an app, which in turn assumes they're setup already and able to do so."
But despite the omnipresence of mobile devices, it appears that many are intentionally avoiding mobile-based activities relating to the financial services world. Earlier this year, a survey conducted on behalf of the Deloitte Center for Financial Services found that 61 percent of consumers that do not regularly use mobile devices for the financial needs cited security reasons as the main reason for doing business offline. One out of five survey respondents claimed that the risk of identity theft was greater when conducting mobile transactions, while more than one-third expressed no faith the security of WiFi and mobile networks.
And this fear may not be without reason. In June, the Russian-based Kasperksy Lab warned that U.S. consumers faced the threat of a new malware called Svpeng that targeted mobile banking apps and then locked the mobile device—the malware will not unlock the device unless the user forks over a ransom.
"To boost adoption and set the stage for more ambitious applications, companies will likely have to take tangible steps to reassure consumers about the security of their mobile financial transactions,” said Jim Eckenrode, executive director of the Deloitte Center for Financial Services."
Finally, there is another option when it comes to app development: Consider a Web-based app instead of a native app.
"A good, solid, responsive Web site or Web-based app will fill the need perfectly,” said Robichaud. “A Web-based app will scale to any resolution and work across all smartphone devices. This approach bypasses all the device-dependency issues entirely–it is as easy as hitting a Web site and does not require traversing any hurdles akin to downloading and installing a software app. And security is relegated to the server side, where admins already are experienced, and already have things locked-down."