Customers’ demands are threefold: personalisation, ease and, most of all, speed. However, it still takes 24 hours to receive a DiP.
Cloë Atkinson is managing director at Mortgage Engine
Right now, mortgage customers’ demands are threefold – they want personalisation, ease and, most of all, speed. However, it still takes an average of 24 hours before borrowers receive their decision in principle (DiP), even though technology can now reduce this process to a matter of minutes.
This means that, if mortgage brokers are to cater to the modern customer, getting on board with digital platforms is a must. This will be especially important for small and medium-sized brokerages who will need to juggle evolving customer demands and a booming housing market with maximising their business potential for the long-term.
The need for speed
Government incentives like the stamp duty holiday are not only good news for borrowers – they create a surge in activity for brokers too. In fact, the latest data from Twenty7Tec revealed that brokers processed twice as many loans than usual in August.
However, brokers are also facing an influx of queries from clients worried about the financial impact of the COVID-19 crisis. In turn, this means that brokers are having to focus on customers who are concerned about their financial situation or need further support – and this is demanding a lot more of their time than usual.
Although the economic toll of the pandemic remains unclear, it’s likely that the consumer demand we are seeing currently will continue, if not increase, over the long-term as numbers of unconventional borrowers grow post-crisis. As a result, brokers will need to find a way of serving customers more quickly, but without sacrificing the quality of their service.
The good news is that mortgage technology has developed enormously over recent years, including the development of two-way application programming interfaces (APIs), which can effectively streamline the mortgage application process.
Technology to the rescue
A two-way API enables the flow of information from brokers’ systems to that of multiple lenders. As a result, lenders can make eligibility decisions in a matter of minutes, rather than labouring through individual applications. In many cases, customers can receive a DiP within 60 seconds.
This technology is exciting, but is it a game-changer? We think so. The combination of the COVID-19 crisis, unpredictable economic conditions and the government’s stimulus is having a far bigger impact on the housing market than ‘usual’ patterns of activity, meaning brokers need to react with more speed than normal.
Fortunately, APIs make this possible. Fluent Money, for example, recently connected with Mortgage Engine’s API-driven platform, and since then, the North West based brokerage has been able to significantly reduce the hours – 105 per week to be exact – it would have otherwise spent rekeying customer data for multiple mortgage applications.
What’s more, onboarding this type of technology is a relatively simple process for brokerages operating on a smaller scale, a fact which might be overlooked by many. Small to medium-sized brokerages needn’t worry about it taking months to establish an API-driven platform within their business – it typically only takes two weeks.
In an ever-changing market, we see technology as the solution to future-proofing smaller brokerages. By reducing the number of hours spent keying in customer data, and streamlining the mortgage process, advisers quite simply have more time to assess complex applications and deliver a more tailored service for clients who need it – benefits which will ensure their success in the long-run.
