And what has been the impact on brokers?
The pandemic caused a seismic shift in the mortgage industry’s approach to technology and innovation. With numerous lockdowns and restrictions in place, the mortgage industry was forced to adapt to the new ‘normal’ with brokers meeting clients over Zoom and other online platforms, virtual house tours being held, and robotic process automation helping in areas like loan origination, quality control and customer service.
However, with most pandemic restrictions now lifted what has been the long-term impact of tech advancements on the mortgage sector?
Post-COVID how have technology advancements impacted brokers?
Justus Brown (pictured), founder and chief executive of Acre, said during the pandemic, ways of working came under a microscope, from how brokers on-boarded and verified clients, to how they were able to remortgage people they could not meet.
“As a society, we had to become more open to new technologies in our everyday lives and this forever changed the office too,” he said.
The surge in openness to technological changes, Brown said, enabled a long list of changes that might have otherwise taken years. For example, he pointed to video calling, electronic address verification, remote liveness and identity checks becoming vital parts of the advice process.
Lenders, Brown added, also had to adopt technology at a faster rate, fundamentally transforming the way brokers could operate.
“Three years on, and we have not seen the digital transformation of the industry slow at all,” Brown said. From conversations he has had with advisers, brokerages and networks, people are not going back to how things used to be.
“Brokers are battling against tough economic circumstances and Consumer Duty, they do not have time to restart manual, paper-based, repetitive processes,” he said.
The advancement of technology since COVID, Brown said, has helped ease these pressures, and made securing the right product for clients quicker and easier while reducing risk.
“Rather than backsliding, in a down market like we are in today, brokers are looking to technology to maximise customer touch points, while delivering opportunities for additional revenue streams that can keep brokerages afloat,” he added.
What further technological advancements do brokers want?
Despite the enforced advancement since COVID, Brown believes many brokers are still not forward-thinking when it comes to utilising technology in their core advice process.
“The way we talk about this internally is the faster horse problem, i.e. if you asked people prior to the automobile what they wanted, it would be a faster horse not a Ferrari or a Concorde, since they could not conceive of these not-yet-invented ways of getting around,” he said.
Brown added that in the 1990s, core advice workflows were digitised and a set of tools developed that supported brokers with fact finding, key facts illustrations, and mortgage product search.
“Sadly, that is where the innovation stopped and not much changed for over a decade; it turns out that if your business model is to sell licenses to brokers, then you do not want brokers to be more efficient, because that limits your growth,” he said.
Back when Trussle and Habito entered the space, Brown said, brokers were worried that they would steal customers away, but these efforts to divert market share digitally have failed.
“What the market needed was a new approach to fundamentally change how brokers work, not a way to divert leads away from brokers,” he said.
Brokerages do yearn for better technology, he suggested, in particular to manage and maximise the value of their existing customer base to attract new leads, to protect their business from regulatory changes like Consumer Duty, and to lower their cost to serve a customer, for example by increasing acceptance and completion rates.
This sits alongside the desire to give more holistic advice, he added - for example by thinking about protection, home insurance, and conveyancing as a part of the overall services homebuyers need.
“Taken together, when technology improves these core processes, it makes brokers simultaneously more profitable and lowers risk because of better documented and more consistent advice processes, with much better outcomes for customers,” Brown said.
How do you believe the advancement of technology since COVID has impacted brokers? Let us know in the comment section below.
