A popular UK bank noticed that fewer people were finishing their mortgage applications after new regulations and risk indicators were put in place. They asked us to check their mortgage business to find ways to recoup revenue and establish themselves as the “go to” bank for mortgage in the UK.
Our initial review turned up early-warning self-identification drop outs and issues with the existing control infrastructure. But our findings went beyond compliance requirements and revealed fundamental gaps in the customer experience. It became clear that the root cause of the problem was the customer journey.
After deconstructing, and rebuilding, their mortgage customer journey, the client as able to save c.£1M in expenses per year, while increasing revenue by c.£8M per year.
The client knew that to improve their customer journey, they would need to commit for the long haul with a modest-sized team, fully dedicated to the effort. They embraced the chance to challenge their status quo and commit to making change happen.
Recognizing that they needed an external viewpoint to assess the customer journey, our client called upon our expertise. We completed a holistic review of the journey from the following perspectives:
You simply cannot rush or underestimate the complexity of a journey re-design. It can be likened to changing the wheels on a bus while it’s travelling downhill at speed. A considered, phased and structured approach was required to truly change the journey; not tinkering around the edges and the starting point.
Only by understanding, documenting and controlling the existing journey could we consider steps to re-design. We delved into several aspects of their process.
Bridgeforce worked shoulder-to-shoulder with the client’s highly engaged team to gain clarity on stability and consistency of their process and credit policy. A detailed data mapping exercise helped identify gaps in both controls and data. We were also able to assess how well the enterprise understood their process.
Findings showed that the existing journey was complex, too long, potentially confusing for customers and had high drop out rates. Stabilizing and controlling the existing journey provided a short-term solution to minimize risk, improve on the existing customer experience and satisfy regulatory requirements.
Once the current journey was stable, and the business understood their existing process, we could move to re-design. The client agreed that to reduce journey time and hand-offs they needed to remove unnecessary loops, improve quality of advice and make customer communications clear throughout. They eliminated any steps that didn’t bring value. Ultimately, they wanted an upfront, robust lending decision through an enhanced credit assessment and a process to ensure the customer was ready to move to each new stage.
Introducing the new journey into a controlled pilot environment enabled us to use the existing journey as a control group. However, testing requires forethought, focus and ongoing tracking. The client needed new procedures and staff training. We built additional controls and all elements of tracking the pilot to identify defects (and corrective action), risks and measures of success.
Implementing the new journey into business as usual started before the pilot was complete and included a full business readiness plan. We used a phased approach to maintain controls and closely monitor performance. Most importantly, the team could prevent customers from moving to the next stage of the journey before receiving all mandatory information.
Crucial Elements of a Business Readiness Plan
Sustainability is the most important phase of a customer journey change program. This allows for easy incorporation of future changes and minimizes the risk of disrupting the new journey. To ensure sustainability, we recommend identifying change control gaps within the organization.
In support of improved sustainability, the business introduced a full impact assessment process for future change, a procedural change process and governance to protect the journey.
Sustainability of a new journey requires constant measuring of controls and processes to manage change effectively. The client developed (with our help) a new mortgage performance dashboard to provide ongoing intelligence. As the saying goes, “what gets measured, gets attended to.” This quote truly reflects all considerations needed to redesign processes and critically sustain change.
Examining the steps it takes to interact with a customer (the customer journey) and finding opportunities to build upon – or smooth out – can lead to a compliant, logical, efficient and resilient journey. The client transferred their successful pilot into business as usual with implementation of the new journey. The effort began to show immediate positive results from customers and to the bottom line.
“…I applied for a new mortgage…the changes to the journey are incredible. The revised process is simple, defined and efficient; resulting in a significant reduction in the time I spent on the phone from 4 hours to 2 hours. #Amazing!” – Client Executive
The client’s customer journey time reduced by 50%, which was a huge bonus for mortgage loan customers. Additionally, missed adviser appointments fell from 13% to 1%, and the client booked the same loan volume with 11,000 fewer adviser appointments. Because we built clarity of the process into the journey, the client team no longer had to chase calls about applications. They reduced this activity from 50% to 5%.
Operational risk decreased because of the increased controls to prevent customers moving to the next stage of the journey before all the mandatory information was received. Additionally, the decline rate at the adviser stage fell from 11% to 3.5%. Conduct risk decreased with zero “wrong customer outcomes.”
From a bottom line perspective, the business exceeded its volume plan and decreased operational expenses by over c.£1M per year, while increasing revenue by c.£8M per year.