Change Sciences study looks at online financial Web sites
By COCO SALAZAR
12/4/2003

According to a new study, a Menlo Park, Calif.-based company reigned supreme in easing the process of one of the most complex and daunting tasks on the Internet -- applying for a mortgage online.

In its fourth quarter web site customer acquisition report, Change Sciences Group Inc. said that E*TRADE Financial's Web site had the easiest-to-use online mortgage application process because of its easy access to rate quotes and short, trouble-free application forms. The reigning company reported it originated $364 million in direct mortgage loans in October.

Wachovia Corporation, which reported third quarter mortgage loan volume of $22.1 billion, took second place. Change Sciences said the site has undergone significant changes since the third quarter. The site's "lending center" opening page has a more extensive outline of links to tips and information for customers, compared to E*TRADE, where rate quote access is placed directly on the lending page and not as much explanation is given on each link.

Third on the list was Bank of America, which reported mortgage loan originations of $39.5 billion in the third quarter. The site says it takes 20 minutes to get pre-qualified, while Wachovia estimates it takes 15 minutes to complete an application. Change Sciences noted the company improved the readability of its rate quote results by reducing the amount of visual information, making it easier for the customer to understand the rate quote.

The three company sites also topped the list in the third quarter, according to the report.

According to Gomez.com, another company that says it helps businesses measure and improve customers' online experience, the top three banker sites were Citibank, Bank of America and Wells Fargo. E*TRADE took the fifth spot. The ranks were determined by Gomez Scorecards, which measure the quality of online financial services offerings, focusing on ease of use, customer confidence, onsite resources, relationship services and overall cost.

Change Sciences said the sites in its study were ranked on overall usability, benchmarked by its Typifi process, which simulates how a customer experiences a site, such as the amount of effort a customer must put into finding company mortgage products on the site or getting access to rate quotes. The research furthers Change Sciences' mission -- to help solve user experience problems and increase customer retention for its clients, which include General Electric, JPMorgan Chase, and Citigroup.

Filling the remainder of Change Sciences' top ten positions, Citibank came in fourth and GreenPoint, Chase, National City, Bank One, U.S. Bank and Washington Mutual, followed respectively. The research group noted that Mortgage.com and Charter One were excluded from overall rankings because they are mortgage-only sites and the goal "Finding mortgage products" was not applicable to them. Wells Fargo was not included because interaction with a mortgage consultant is required through much of the online application process.

Gomez.com said the top three mortgage sites on its scorecard were IndyMac Bank Home Lending, Countrywide Home Loans, and E-Loan, while E*TRADE Mortgage placed fourth.

Change Sciences estimated that one-third of last year's mortgage applicants researched how to obtain a loan on the Internet. But, due to the complexity of online application processes, only 1% of home purchase applications and 3% of refinances are currently conducted online. On the other hand, the group forecasted that over 10% of all mortgage loans will be conducted online within the next five years.

"The web offers an unprecedented opportunity for lenders to reach new customers," said the group. The design of online applications can mark the difference between creating satisfied, lifelong customers or lead frustrated customers to competitors.

"Lenders that work to optimize the experience they provide customers online will increase market share and minimize acquisition costs," said Change Sciences partner Steve Ellis in a statement.

Making rate quotes easier to find and presenting them more clearly and concisely, writing copy in a language customers can understand and eliminating confusing questions, can all ease the process of obtaining an online mortgage, said the group.

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