As the homebuyer demographic shifts in the US, mortgage businesses need to prepare. This is the very first generation that has grown up with information at their fingertips and this influences home buying trends.
For example, 20% of Gen Z consumers prefer to start their customer service interactions with a chatbot, compared to only 4% of the Boomer generation. Lenders can leverage this preference for conversational AI systems to deliver better borrower experiences, attract more leads, and grow revenues.
The Role of Conversational AI in Mortgage
Conversational artificial intelligence refers to a chat-based interface where the user interacts with a software robot via text. Not all chatbots use AI, and you can program these interfaces to provide rules-based responses to standard queries.
Conversational AI takes this one step further by using artificial intelligence algorithms to understand users better. AI also allows bots to respond just like a human mortgage executive, making users feel more comfortable with the entire experience.
In recent years, conversational AI has become crucial in the mortgage business, at every stage of the funnel. From capturing mortgage leads to nurturing them and even during the servicing stage, chatbots can automate key conversations. This leaves your human mortgage executives free to focus on other tasks and also makes it easier to scale operations.
New Expectations from Gen Z Home Buyers
Gen Z – or those born between the mid-90s and early-2010s – represent a growing portion of the home buyer market. The youngest Gen Zer is now entering the workforce and looking to earn and save to buy their first properties. This generation represents a distinct divergence from previous ones:
- Gen Zers are digitally native and expect immediate responses to their queries. To them, looking up information in a library or a slow dial-up internet is a thing of the remote past. This makes them uniquely suitable for conversion through conversational AI.
- The US Gen Z homebuyer is much more ethnically diverse than their predecessors. Approximately 20% of Gen Zers are Hispanic and 52% are White, compared to the Boomer generation, which was 82% White and 4% Hispanic. This opens new housing markets for mortgage lead generation while also raising concerns about the ethics of conversational AI.
- This new generation prefers to buy homes in cities like Utah’s Salt Lake City, Oklahoma City, Indianapolis, Cincinnati, and Minneapolis – their top five locations for home purchases. Importantly, they tend to avoid the more expensive coastal areas.
To address these expectations, lenders must come up with new ways and tactics that are different from Boomers or even millennials. Intelligent chatbots tap into these key traits of Gen Z homebuyers (responsiveness, inclusion, and efficiency) to provide a compelling value proposition.
Capturing Gen Z Mortgage Leads with Intelligent Chatbots
To leverage conversational AI, when working with Gen Z homebuyers, follow these best practices:
1. Integrate bots with social media
Gen Zers are also the social media generation, and often, their home-buying journey will start on your company’s Facebook page instead of the official website. So, it is helpful to make use of social messaging services that can remain available around the clock. Prospects can quickly get their queries answered on a platform of their choice, and it is easy to track and measure mortgage leads.
2. Make conversational AI as interactive as possible
Conversational interfaces are not limited to text. You can weave in a host of interactive elements – e.g., verifying user identity with bot-based CAPTCHA. Building a conversational AI system that acts as a mortgage calculator is also a good idea since many Gen Zers are first-time homebuyers. Mortgage calculation is among the first steps in the borrower journey when you think about capturing mortgage leads.
3. Proactively deliver chatbot communications
Chatbots do not need to be forgotten unless a customer query triggers it. You can program conversational AI interfaces to send proactive alerts, notifications, and promo messages. For example, a Gen Z homebuyer would appreciate it if a chatbot reminds them to submit their loan application papers before the stipulated deadline.
4. Be discerning about artificial intelligence
Conversational AI is not a one-size-fits-all model and there are many ways to use artificial intelligence. You can use AI to auto-complete customer queries as they are typed giving Gen Zers the intuitive digital experience they expect. You can also use sentiment analysis to understand the borrower’s mood and temperament so you can take the right steps to convert every mortgage lead. As a best practice, work with experienced technology partners who are well-versed in AI and automation in mortgage.
5. Support conversational interfaces with robust data stores
AI can only work on the data it can access. Therefore, a great conversational AI experience must be backed by a solid foundation of data – an updated database that delivers the latest news, centralized borrower information to reduce errors, and a smart querying engine to handle volumes. Large mortgage businesses may choose to implement data fabrics to further expand AI’s capabilities.
Read More: The Impact of AI on the Mortgage Industry
Adapting to a Technology and Culture Shift
Gen Z homebuyers mark a technology and culture shift in the mortgage business. Unlike their millennial counterparts, they want to buy early but keep it affordable. Gen Zers are always informed and are not afraid to take a second opinion. They are also more educated than previous generations on average, both digitally and formally.
In this context, a conversational AI interface helps build trust while ensuring a convenient workflow. That is precisely what you need when attracting Gen Z mortgage leads at the top of the funnel.
Ask Nexval’s mortgage tech experts about how to get started with intelligent chatbots today.