Why banks need to offer a competitive home loan package

In a highly competitive banking environment, beyond offering attractive interest rates, lenders need to focus on new and creative ways of packaging home loans with additional value. Clive Bredenkamp, Proptech IT Executive at e4 says that as consumers seek more competitive home loans, lenders must continually look to create valuable long-term relationships with their clients.

“Entering a cycle of declining interest rates and an increasingly optimistic economic outlook has created a more favourable buying environment for homebuyers, which in turn presents a more competitive environment for banks, where simply offering the best rates may not be enough to fully capitalise on market share. Rather, banks have an opportunity to differentiate themselves through a holistic, value-added customer experience as well as bundled services that cater to their homeownership journey,” Bredenkamp explains. “Banks that incorporate digital tools, rewards programs, personalised payment plans and even additional packaged services such as solar financing options and home maintenance support packages can differentiate themselves from competitors.”

This shift is largely driven by digital-first entrants reshaping the market, who are setting a high bar in customer expectations. “Additionally, the ability to quickly offer home loan rates and approvals at the click of a button can set the winners apart in this dynamic space,” Bredenkamp adds. He says to stay competitive, banks should constantly revisit conventional approaches to home loans embracing new technologies. Customers are increasingly seeking streamlined and tech-enabled interactions and banks that prioritise customer experience will better capture the market.

While lenders may want to embrace new technologies in their processes, often the complexities involved in integrating new technologies with traditional banking systems are significant. “However, the benefits are also significant through faster and more transparent loan approvals and richer, value-added services that improve the customer experience with long-term value for lenders” adds Bredenkamp.

He says lenders should select technology partners that can facilitate this adoption effectively. “Having a partner who not only understands the industry but has also helped shape the technology supporting the property transfer process is vital. e4 has pioneered this journey for 25 years and continues to take the industry forwards.”

There are often multiple parties involved in the sale and transfer of a single property, from sellers, buyers, lenders, transferring attorneys, cancelling attorneys, bond attorneys, to the deeds office, municipalities and other government services. “The more efficient each link in this value chain is, the better the outcomes for all parties. For banks, as well as other parties, the future of home loans leans largely on the ability to strategically integrate services that add tangible value to the consumer experience,” says Bredenkamp.