Why Digital Mortgages Will Overhaul Traditional Banking Models

Digital mortgages are expected to displace today’s traditional mortgages, and this phenomenon will both be an opportunity and a threat to traditional banks.

LENDING & CREDIT

Which side of the ledger banks will find themselves in will depend on how they transition away from their branch-based operations, S&P Global Ratings said in a report.

“By the time today’s traditional mortgages are repaid, the process that created them will almost certainly no longer exist,” S&P said in the report “Future Of Banking: Digital Mortgages Are Game Changers.”

“In their place will be digital services and digital mortgages, which S&P expects will reshape house lending and retail banking to the benefit of borrowers,” it added.

Two key factors

How banks tap into this would depend on two things: how they transition away from branch-based operations, and the quality of the digital platforms and products they offer.