The sheer effort needed to power the old, legacy systems which are still common, provide the lion’s share of the carbon footprint created by mortgage lenders.
Garry Larner is commercial director of ieDigital
When you examine the main contributors to what causes a high carbon footprint, it is easy to see why the one created by many mortgage providers is substantial.
Many providers are still largely reliant on a largely antiquated process. These legacy systems often include filling in multiple paper forms, travelling to attend meetings and engaging in long telephone conversations or video conferences. These methods all involve the use of substantial fossil fuel resources, such as electricity powering the offices, and oil powering the engines that convey people to meetings.
This is very much at odds with the current overall business commitment to improving ESG standards and an over-arching promise of looking after the planet. Additionally, other vital components of the mortgage supply chain, including the essential brokers, are now actively looking at their own ESG activity and are increasingly likely to favour lenders who are prioritising the reduction of their own carbon footprint.
Additionally, mortgage providers need to pay their staff for carrying out these routine tasks, often involving many hours, time which could be much better spent being channelled into other much more productive and beneficial tasks.
The customer services problem
I am sure most homeowners would prefer to streamline everything to do with planning, managing, and renewing their mortgage.
After all, other branches of the financial services sector have made it easy. We now take the ability to open and service new bank accounts solely online, when just a few years ago it necessitated a physical visit to a branch clutching reams of paperwork and identification. We can now buy general insurance products instantly rather than rely on visiting high-street insurance brokers, and even more niche products, such as motor finance, can be arranged solely online.
If mortgage providers joined this online revolution, I am confident customers would react positively, and their customer service satisfaction rating would go through the roof (assuming essential other components, such as rates and repayment details, are all being positively received).
The ability to research, compare, review and sign for new products solely online, as recently announced by Virgin Money and to renew a fixed-term deal online, will propel lenders into the same positive territory being enjoyed by other financial services providers and ensure they are fit for ongoing success in years to come.
Therefore, what should mortgage lenders be doing to reduce their carbon footprint and prove to brokers, customers, and other parts of the supply chain that they are taking their overall ESG efforts seriously?
Updating old systems
The sheer effort needed to power the old, legacy systems which are still common, provide the lion’s share of the carbon footprint created by mortgage lenders.
To overcome these complex and antiquated systems, while improving the experience for customers, lenders should look at modernising and updating their systems. While updating old technology can be a challenge, it is one that can be overcome – with excellent results.
Decoupling the front end with the backend system provides a great alternative to help drive change and innovation at pace. Having a modular and flexible digital experience platform which empowers the business to introduce new functionality against a change timeline that the business requires can be effort that is well spent.
Multi-channel support
Customers’ expectations are high due to the Amazon effect. Being able to start a journey on a mobile device is now expected and having instant support from broker to lender and guidance through a chatbot or direct contact to an agent is the new norm.
The winning benefits include increasing customer engagement and experience, providing next generation features such as biometric authentication and live chat, and helping customers to self-serve.
In conclusion
Technology lies at the heart of the ability for mortgage lenders to support and help the brokers to reduce their carbon footprint, remove as much friction as possible and create fully digital processes. When it comes to matching the status quo achieved by banks, insurers and motor finance providers, much effort still must be made.
However, for those lenders concerned they are only starting their digital transformation today, it is still better than starting it tomorrow. Deploying digital mortgage functionality is not the vast and expensive undertaking it once was – and when customers, brokers and other parts of the supply chain respond positively to these changes, I am confident many providers will think this is something they should have looked at years ago.
