Gen Y hunting for that elusive digital mortgage

by Miklos Bolza17 Mar 2017
When it comes to applying for a mortgage, 76% of Gen Y professionals want to have a face-to-face conversation with a broker or lender.

A new report by professional services firm KPMG, entitled Banking on the Future, surveyed over 1,400 professionals in Gen Y (defined as being between 18 and 30 years old).

Despite this younger generation predominantly opting for the digital channel to meet banking needs such as savings accounts and credit cards, face-to-face meetings were ultimately chosen for larger financial decisions such as mortgages.

The report suggested that this highlights an “unmet opportunity” for lenders to design a digital experience that caters to consumer needs when taking out a home loan.

Daniel Knoll, financial services partner at KPMG, said that prior research – focus groups from a 2015 survey – indicated a demand for digital solutions relating to home buying transactions.

“Given this, we found the result in 2017 of 76% seeking face-to-face support during the home buying process an interesting finding (given its consistency with the 2015 finding),” he told Australian Broker.

“When we questioned the 2017 respondents on this result, they indicated that a significant portion of their research and analysis for the home buying experience would be conducted online – prior to a face-to-face session with a broker or frontline bank representative – with a genuine interest in broader digital solutions should they be effective and convenient.”

This means there is still a role for brokers and physical networks to play, especially when servicing the ‘first mortgage’ needs of Gen Y. Consumers who already have gone through the process, eg buying their second home or looking to refinance or invest, would be more willing to use a digital mortgage channel however.

Knoll said there would still be an enduring need for some level of face-to-face support regardless of the prevalence of digital mortgage offerings.

“The impact of digital solutions on the home buying process will be dependent on the acceptance by the public, perceptions of convenience and the ability to attain the right product to meet the customer’s needs,” he said.

Related stories:

Millennials ready to jump into housing

One in four millennials stressed over potential rate rise

Gen Y heads up investment property pack