Although the majority of lenders offer online application services, few consumers apply for a mortgage in this way. Yet Royal Bank of Scotland seems to be doing something right: its range of online tools for homebuyers has attracted 10,000 users to the bank’s website over the last eight months. RBS’ online success proves that a bank can do far more than just lend its customers money.
RBS’ website has seen a 132% increase in mortgage-related page views in the last eight months.
Royal Bank of Scotland has reported that its website has seen a 132% increase in mortgage-related page views in the last eight months. Yet most online mortgage offerings struggle to attract customers: Datamonitor has found that only 4% of UK consumers who arranged a mortgage over the last 12 months did so online. In contrast, 10% of credit cards were arranged online, as were 14% of finance or loan arrangements.
Mortgages are currently unsuited to the online channel for several reasons. A mortgage is the biggest financial commitment a consumer is likely to make, leaving many people reluctant to arrange one without speaking to an expert.
They are also complicated purchases, requiring detailed information that may not be entered easily into an online application form. Indeed, it’s impossible to complete the entire mortgage application process online, as signatures and legal documents are needed; this may put consumers off starting the process in this way.
To get around this problem, some UK banks now offer other value added online services. RBS offers an online house clinic, interior design advice from an online house doctor, tips on house buying from the Which? Guide to Moving House and a section devoted to neighborhood information sorted by postcode. Like many other online mortgage sites, it also offers a mortgage calculator and jargon buster.
Since RBS does not receive any direct benefit from consumers using the value-added tools on its website, cynics will argue that the investment is not worthwhile. However, consumers who use then online tools may head to the bank’s branches to purchase a mortgage – and do so because they want to act on information gained online.
Overall, there is much more to online mortgage distribution than simply facilitating online mortgage applications. Get things right and consumers may come running.
Related research: Datamonitor, Online mortgage distribution (BFFS0170)
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