Plugging the technology gap

The following article is written in association with Iress

Brokers have nothing to fear from technology, fintech company Iress has urged – assuring advisers that it’s an enabler for success in today’s evolving mortgage market.

That’s according to Warren O’Connell, head of business development for sourcing at Iress, which develops software that underpins a large part of the sector. “There are still largely untapped market opportunities that technology can help brokers to crack into. The protection opportunity is a prime example.”

Iress is a financial software provider, with a 10,000-strong clientele, ranging from international financial services brands to advice firms of all sizes, from challenger banks to insurers, to investment managers, traders and brokers. Individual users of its software total half a million.

Central to its product range are Xplan Mortgage - a one-stop advice, sourcing and CRM system for mortgage brokers and advisers – and Lender Connect, which helps speed up the mortgage process by using API technology to connect a broker’s business directly with lenders.

“We do the heavy lifting,” shared O’Connell. “We gather all of the information from all of the lenders. We gather all the information from all the insurance providers, and we put it in one user interface, and one product, to enable you to source what’s out there in the market. Our biggest USP is the fact that we own both mortgage and life insurance sourcing software. So, we have competitors in both spaces, but they do one or the other, whereas we offer both.”

He continued: “With some of the recent propositional enhancements that we’ve created, it gives you a one stop shop for everything that you need to be able to source, recommend and purchase both mortgage and life insurance policies. It benefits the broker, which in turn enables them to have a conversation with the end consumer, ensuring that they’re highlighting all of the key benefits and USPs of each product and service that they’re selling. So it really does benefit brokers and customers.”

The protection opportunity

O’Connell referenced the findings of a recent report from the Association of Mortgage Intermediaries (AMI), which indicated there was more that could be done by the broker community to highlight the benefits of protection.

“One of the key things there was that the percentage of customers who recall protection being raised by the broker has increased to 50%, versus 36% in 2020,” he said. “But that still means that there’s 50% of mortgage brokers that aren’t talking about protection which is quite surprising really, given the cost-of-living and the need to cover your mortgage should the worst happen.

“Protection is fundamental when taking out a mortgage, it needs to be considered. Consumers often don’t trust protection, they think it’s too expensive, and these are myths which need to be dispelled. The only way that we can plug this protection gap that keeps getting spoken about is through brokers.”

He added: “Income protection is a product area that has grown rapidly in recent years, which could have come about as a result of COVID. We certainly saw quotes increase in the early part of the pandemic - it takes something like that for people to realise, ‘well, if I lost my job, I’ve got no cover in place.’  So, it has gained traction, but it’s certainly not at the level that it needs to be.

“There was this common issue where mortgage brokers wouldn’t talk about protection when the times were good, in a buoyant mortgage market, and then when the market fell off, they would say, ‘Oh, well, I can now start talking about protection’. That is decreasing, and our product is helping to achieve that.”

Intermediary relationships

O’Connell noted how Consumer Duty had put a new focus on doing what’s best for a customer.

“The need to highlight the protection needs of a customer has never been more important than now,” he suggested. “With our software, we automatically run protection quotes at point of sourcing for a mortgage, without any need for rekeying, without any need to press any more buttons to enable the broker to have the conversation with the client around the cost of life insurance at point of sale of a mortgage.”

The relationship that Iress enjoys with intermediaries is important, O’Connell explained.

“We need to be listening to them,” he stressed. “We need to be working with them and we need to understand their needs to make sure that our product is fit for purpose. Software providers often build and produce propositions and products that people are asking for rather than building something and hoping that they will come.

“We host something that we call the protection forum. We get the key insurance providers and brokerages in a room for a day to discuss the markets and ask, ‘how can we help you, what do you need?’, and one of the direct bits of product enhancements that we delivered as part of that was our features proposition.

“For many, many years, the sourcing products and portals were designed just to literally show premiums for products and how much they were going to cost. We’ve created a proposition where you can compare and contrast the products side by side, taking into consideration those qualitative aspects of the product.”

2024: More opportunity ahead

O’Connell pointed to the need for brokers to have a greater online presence to better connect with a younger generation of customers, with AMI’s research suggesting this demographic was growing. Advances in technology now also enable advisers to seek information to support quotes for protection, for example smoker notes.

“Portals and sourcing systems would historically ask just a ‘yes or no’ smoker question, but with e-cigarettes and all these kinds of things, insurers have started to expand on that question now,” he explained. “So they might ask whether someone who is currently a non-smoker used to smoke. We have worked with our insurance providers to capture what their smoking standards are and to expose that information to help a broker understand, and therefore, tailor a quote for a client specifically.”

O’Connell reflected on what’s been “an interesting year” for the industry.

“The mortgage market has been turbulent, with all the interest rate rises and products being removed and changed, sometimes daily,” he acknowledged. “So that creates a headache for lenders, for us, for the broker and for the customer. So, the mortgage market has been very busy – and at times difficult.”

He was positive about the coming year though, believing that mortgage connectivity would be an area for greater exploration - for example, pre-populating data in a lender’s extranet to increase or decrease the time it takes to purchase a mortgage product.

“2024 is all to play for,” O’Connell enthused. “We don’t have a crystal ball, so we don’t know what’s going to happen with interest rates and what lenders might decide to do. But for us, it’s an interesting time to look at what else out there could benefit the customer.”