Until recently, most of an FI’s home-lending volume originated in branches, and home equity was no exception.
That’s changed at least in part due to the pandemic, when branches closed or restricted their operating hours – any discomfort borrowers and lenders may have had with remote interaction and digital delivery was put aside through necessity.
The trend has continued as a result of digital’s growing more sophisticated and its embrace by a younger generation of home buyers. Fully online applications for home-equity products now represent close to a quarter of all volume (see chart), nearly triple what it was pre-pandemic. Over the same period, the branch’s share of home-equity volume has plummeted from roughly 75% before the pandemic to less than half now, and indications are the trend will only accelerate.
The clear takeaway for traditional lenders is that they will have to take a page from the alternative providers whose entire business models are based on remote and digital delivery – the alternative is surrendering an increasing share of that business.
Booked Home Equity Unit Distribution By Subchannel
Home equity volume through branches keeps shrinking.
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