Digital Transformation – we are so far away, it’s scary !


A couple of months ago, my wife and I found a house that we really liked – nice neighborhood, close to our daughter’s school and so on. So we decided to put an offer and see if we could get that house.


Our realtor uses docusign – so the entire offer process was done online. And I started to think that this home buying exercise would be such a frictionless experience. Boy , was I wrong !

Lets start with the loan application.

We had enough savings to put a downpayment .  I have an extremely good credit score and fairly low Debt to income ratio. I have also had my checking, savings and credit card at the same bank for many years. I even had my past mortgage and line of credit with them . The bank would know everything that happens in my life – after all I have been in their top tier of loyalty program . I generally expected to walk into the bank’s office , sign some docs, share my tax info and W2 etc,  and expected a loan to get funded in a few weeks . 

I also wanted to take a home equity line of credit from the same bank and filed an online application for that .

Guess what – turns out , my bank doesn’t know anything about me . My line of credit application went into a black hole . Few weeks later , I called them and forced them to work on it . 90% of information they collected from me are things they readily have with them but didn’t seem to have access to ! 

The end of this process was even more weird . They sent me a letter saying I asked for $X and it is denied because my house appraised at a value that is slightly (by few thousand dollars ) lower than what’s needed for the line of credit . So rather than offer me a slightly lower credit line , they just denied it . So much for all the top loyalty tier and time spent on it . I am still shaking my head on that . Absolutely bizarre !

The actual loan application didn’t fare much better . And finally they came back with a loan that cost me more than what internet lenders offered . Plus they needed several more weeks to close than others . 

Cut to the chase – I went with another lender who offered a better rate and faster time to close . My bank just lost my business – they tried really hard to not win it . 

In hindsight , I should not have been surprised at all . A trained monkey looking at my checking account statements would know when my car lease would end . My bank was never once able to use that information to offer me a car loan . This doesn’t need complicated analysis – it’s just stupid . Clearly, you can’t fix stupid . 

My lender wanted to get a HELOC note for a line of credit I had paid off and closed in past. I  went to the bank only to be given a toll free number . After speaking to multiple people , I found a helpful lady who found the note for me . However she only had two options to send it to me – regular mail or fax . Email apparently is still alien technology for them. I had to call my wife to hook up a fax machine and get the document . My neck hurt from all the shaking .

So yesterday I went to the bank to get a cashiers check for the down payment . I used my debit card – which has my photo – to take the money out of my account . The teller then exclaims she cannot verify my signature because I had opened that particular account online without a paper form showing my signature . My debit card PIN and my photo on it , and the signature on my drivers license didn’t count . She had to get her manager , make me sign more paper before they could get me a cashiers check . Easily an hour lost for me , and three employees at the bank . I now have a bald patch on my head thanks to scratching my head since then till now . 

So that was the bank . Let’s move on to the actual paper work after the loan is secured. Barely 20% of the documents can be electronically signed . Rest needs trees killed and ink spread on paper . Emperically – redundant information to be filled by the title company is probably around 50% across all the forms I had to sign . Chances of making errors are everywhere , let alone the sheer time needed to fill all those forms . Even if “digital” can be ignored , why not at least streamline the paper forms ? 

A company like DocuSign can single handedly disrupt this terrible manual process and bring it to 2016 digital standards . They will have the gratitude of home buyers and sellers across the country – and their money !

These are not insurmountable problems even by technology capabilities of a few years ago – which is why I am all the more annoyed with this . I am not calling out the bank by name – but I am going to find the CEO’s email id and send this information . And then I will wait by my fax machine to hear if he can do something about it . 
 

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15 thoughts on “Digital Transformation – we are so far away, it’s scary !

  1. Congrats for the new home and painful or not, the sweetness of a new home overcome the rest of getting there. Nonetheless, a very unpleasant experience like yours brings us to think not so much about transformation, but how frightening this all REAL world actually is. You tend to think “those financial institutes knows so much about me, track every inch I go and every penny I spent”, in reality, going through and ordeal like yours my friend Vijay, just shows the opposite. We know MUCH more about them than they about us. We all speak highly on such amazingly beautiful systems intelligence, we forgot that they all run on top of foundation that was build in the 80’s. Go figure now, what is more important to fix first 🙂 … either way Vijay, it’s a great story to learn from. Thanks for sharing.

  2. I hope you didn’t hold your breath while waiting for that fax response from the bank’s CEO. 😉

    Now, instead of waiting for his reply, why not make him an offer to digitally transform their bank on his behalf 😉

    Cheers,
    matthias

  3. I am old enough to recall that in the ’90s there were some high-profile reports in top industry periodicals (Harvard Business Review et al.) refering to customer information aggregation from several systems, something that was a kind of “Holy Grail” for the banks, as horror stories in their customer service surfaced. In one particular case, a huge customer could not get a loan of several thousand dollars while at the same time, the same bank issued letters of credit in the millions for that customer. I guess it was more fiction than facts. Silo architecture, whether on premises or in the cloud, is hurting customer experience especially in banks and telcos and for those that will not tackle it in timely fashion, the route.is extinction.

  4. Hi Vijay,

    Congratulations for new home. No one should experience the problem like you faced with home loan. Indian banks are far better nowadays if I literally compare them with above experience from US bank.

    I have completed my home loan process almost online with minimal documentation with Hdfc 3 years ago. It was hassle free.

    I had misconception about US banks which is now changed 180° after reading your experience.

    Thanks,
    Ambarish

  5. Your story reminds me of when my “top 3” bank (who held our existing mortgage, checking, savings & a credit card account) offered an attractive re-fi deal which we accepted. The offer was made in September 2012 but it did not complete until April 2013. The main delay was caused by the transfer of an existing home equity loan. I eventually received around $2700 in compensation for the extra interest I paid. What is really crazy is that the same bank had the same problem in 2009 when the loan was first originated. They paid out a similar amount that time as well.
    It strikes me that the real issue is not just their technology systems, but how they and the people in them are managed. If they had a system that analyzed their data to look for “warning signs” e.g. delays, “top-tier” membership, etc. and then flagged them for action then they could be much more pro-active and improve customer service. Who knows, they could even go in for a bit of process improvement!
    @”V” It’s easier in the UK too – my daughter and fiance are buying a house and the process is much simpler.

  6. Vijay, back home in India, it’s a nightmare. I didn’t move my home loan to another bank because of the thought that no of papers I need to give and sign all of them.
    But in Sweden, it’s much easier I believe. Off course you need to sign the papers but only a few as compared to Other places. We’ve a beautiful tool called BankID. With that you can identify yourself to the bank and get the work done. That too without any paper and signature.

  7. Oh! I thought it was just me. I refied my home with Quicken loans and it was all on-line until the final signatures which we did in pre-printed bound book that the closer brought to my home. On the other hand, we had a similar nightmare with another national bank. A lot of it has to do with the housing crisis. Somehome making the process more painful makes it better. It is embarassing how far behind some banks are.

  8. Congratulations for the new house Vijay. I can correlate to your title company experience but as far as your bank is concerned, it may be time to take your business elsewhere. IBM digital service line has deployed paperless loan origination business process at least for couple of US banks.

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