Mohamed Badat, chief commercial officer of Bidaya Home Finance, explains how digital is speeding up and simplifying the mortgage process.
Global Finance: Please explain the shift in mortgage lending towards homebuying platforms and how it benefits customers.
Mohamed Badat: The process to buy a home is so slow, siloed and intentionally complicated. If the home buying and mortgage qualification process is this bad for me as a relatively sophisticated consumer who works in consumer financials, then it must be impossible for others. Bidaya Home Finance set out to completely reimagine the home buying system by lowering costs, speeding up the process and automating as much as we can. I feel like we’re helping the burgeoning Saudi population achieve their dream of homeownership.
GF: Can open banking data help buyers and sellers make better decisions?
Badat: Bidaya has launched a credit-scoring method utilizing open banking. Based on the customer’s aggregated financial data [we] establish a detailed picture of their spending, saving and borrowing habits, ultimately offering mortgages to people who have not been accepted by other lenders. We’re looking at new and intelligent ways of assessing whether a potential customer is creditworthy, as well as ensuring our mortgage offering meets the needs of today’s consumers. Saudi Arabia has to achieve 70% homeownership levels by 2030 and the traditional methods of qualifying for a mortgage is archaic. Open banking will help Bidaya change the status quo.
GF: How do you tailor social media campaigns to get more new customers in homes and how does this compare with traditional marketing?
Badat: Historically, mortgage as an industry hasn’t delved into creative marketing because the primary marketing tactic was direct referrals from industry partners like real estate agents and builders. As the mortgage industry has grown more competitive in Saudi Arabia, banks and non-bank financial institutions need to focus on marketing strategies that convert. Consumers are spending more time shopping around for different rates, inquiring from company after company.
From investing in social media strategy to updating website content, Bidaya has wanted to differentiate itself, especially because we do not have a retail branch presence like banks. Bidaya Home Finance only has three branches, primarily for KYC purposes, and has achieved 32% market share for non-banks and 3% for the overall mortgage ecosystem, based on Saudi Arabian Monetary Authority statistics. Bidaya is utilizing mortgage promotions thoroughly by engaging with consumers through Twitter polls and interactive videos.
Standing out begins with marketing. Social media and videos have been huge in mortgage marketing, and Bidaya online marketing strategy makes use of video in all its campaigns.
Before Bidaya begins a marketing campaign we understand our audience. We look to what social media platform are visited by our target market age demographic, we see which devices they are using to engage with lenders and then we develop our advertising campaigns. As an example, Bidaya performed a website behavior analysis on a specific segment of our valued web traffic to learn what content is of interest to our customers. This analysis revealed that key customers were interested in learning through training and specifically, learning more about the millennial demographic and credit score. As a result, we focused our energy on creating a mortgage infographic library around these topics.
GF: What innovations does Bidaya have planned and what innovations do you predict for the industry as a whole?
Badat: Too many mortgage lenders and bank counterparts take a systems-first, customer-last approach. Bidaya has stripped away layers of delays built into the old system by using online applications, electronic document gathering and submission, automated loan-decision algorithms (Bidaya’s Decision Smart System), secure online communications and finally, acceptance of KYC through the use of OTP [one-time password] to verify the identity and the use of digital signatures for contracts so that the consumer does not have to step foot into a branch. This is true market reach!
We understand how complex mortgages are. It’s no secret it is extraordinarily complex. But where we differ is that we think computers are better with complexity. Software eliminates human error and human greed.