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STRATMOR Group: Winning Strategies For Banks To Reclaim Market Share

In its May Insights Report, STRATMOR Group explores the opportunities available for financial institutions such as banks and credit unions in the current tough mortgage market. According to STRATMOR, there are several strategies banks can work on right now that don’t directly relate to pricing discipline, cost cutting or operational efficiency, but that can move the dial in terms of gaining market share and improving profitability. Most revolve around improved execution of critical business development activities, rather than on new investments in technology or systems.

In the May InFocus article, Principal Tom Finnegan outlines a roadmap for banks to leverage their strengths and regain their competitive edge. Banks have some natural advantages over independent mortgage banks (IMBs): large customer bases, financial strength and product diversity, he notes.

Despite these advantages, bank market share has declined due to a lack of focus on mortgage marketing and internal referral programs, among other things, according to Finnegan. His article highlights a critical weakness: many bank customers are simply unaware their bank offers mortgages.

While cost-cutting measures offer temporary relief, Finnegan emphasizes the need for a more proactive approach. He offers recommendations for uncovering new leads and shares strategies for creating an improved operating model that will pay dividends both today and in future, more robust volume periods.

Drawing from his own experience as a senior mortgage executive at regional banks, Finnegan encourages bank executives to focus on the mortgage delivery model. “A plan for mortgage is the starting point. The goals must be clear and understood throughout the bank to develop the right target operating model (TOM),” he says. Finnegan recommends banks engage in strategic planning by defining clear goals, targeting select customer segments, and developing a compelling value proposition.

He also advises banks to implement a dedicated mortgage marketing team, as well as train retail staff, leverage existing customer relationships, and create a user-friendly digital mortgage application process. “Retail bank associates with routine customer contact, such as personal or platform bankers, should be equipped with a well-developed referral program that includes a meaningful benefit for those who engage with customers to explore mortgage needs,” Finnegan says.

His article emphasizes the importance of investing in training and quality assurance measures. Reinforcing prospecting skills for loan officers, implementing “secret shopper” programs, and closely monitoring mortgage banking performance are all crucial steps for improvement.