When lenders want to find out their bottom line, the go-to metric is return on investment (ROI), but according to STRATMOR Group, more than your financial returns should be taken into account if you want to maximize that number.
According to a new article published by STRATMOR Group’s Senior Advisor Sue Woodard, mortgage lenders need to assess their own technology investments more accurately to establish an ROI.
To explain this point, Woodward points to a popular brand of home exercise equipment, Peloton, who experiences the best financial growth when users commit to change and adoption of their equipment.
“We buy the equipment with the image in our head of the outcomes—healthier heart, stronger muscles, weight loss, increased stamina—one or all those things are the ROI that we expect for investing in fitness technology,” Woodard writes. “But the only way we’ll see those meaningful changes is with a partnership between the technology and services being provided (in this case, by Peloton) and ourselves the riders, via changes in our own habits, routines and disciplines.”
Woodard continued that this is exactly how mortgage lenders should be thinking about the returns they hope to gain from the technology they have recently invested in new tools for the future.
According to her article, there are typically four categories of benefit that contribute to overall ROI: profitability, productivity, people and risk prevention. Lenders would like to see a return in all these areas, but when they don’t get it, they often blame their technology partners. “Here is an uncomfortable truth: the lender and the vendor both share responsibility for making technology deliver,” Woodard says.
However, measuring the non-financial aspects of ROI is a challenge—this is frequently a process that focuses on what front-line employees are experiencing. Adoption and change management are the keys to increased ROI, and while the vendor can certainly help here, this responsibility falls primarily to the lender. Woodard provides tactics lenders can use to improve ROI, but ultimately, lenders must commit to creating this change.
“Written another way,” says Woodard, “don’t just buy the Peloton. Be the kind of person who is committed to their health and fitness.”
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