How brokers can help lenders pinpoint underserved customers

Lenders need to work closely with brokers to identify underserved customers and technology can deliver a better experience for them, it’s suggested.

David Castling (pictured), head of intermediary distribution at digital lender Atom bank, believes operational improvements have made a real difference to mortgage finance timescales.

“I think the mortgage market as a whole is more open to innovation, to embracing new ways of operating in order to deliver a better experience to our customers, than may have been the case a few years ago,” Castling told Mortgage Introducer.

“That’s why it’s so important for innovative lenders to work closely with brokers in pinpointing where those underserved customers are, and incorporating technology where it can make a real difference.

“We know that the greater use of technology by lenders, such as Atom bank, is making a tangible difference to timescales in arranging mortgage finance. That offers significant benefits, not only to the borrowers themselves since they get that certainty much more quickly, but for brokers too as they no longer have to set aside time each day to chase updates on outstanding cases.”

He observed: “At Atom bank we have spent a lot of time getting that technology right so that it leads to a faster, more efficient process, with the result that around a quarter of applications now get an offer on the very same day.

“But really, the sector as a whole is just scratching the surface on what technology and digitalisation can do. There is still room for improvements on the application process itself, and potentially even room for AI-driven underwriting in the future.”

Castling added: “It’s not as simple as just handing all of the process over to technology though; you have to get the balance right with some level of personal touch. I’m sure that over the next year we will see the continued development of a more streamlined and efficient mortgage application process, with the greater incorporation of technology at the heart of it.”                                                                                                                                                 

How big a problem is adverse credit?

The app-based bank, situated in Durham, offers a range of mortgage products, including buy-to-let, remortgage, and product transfer, and considers those with adverse credit, with its near prime mortgages. Atom says it’s important how clients are appraised, particularly if they have a less than perfect credit history.

“The difficulties of the last few years have inevitably resulted in greater numbers of clients having the odd payment issue in their record, a late or missed payment or two,” noted Castling. “These are not a sign of a bigger problem, but rather a short-term blip, yet this black mark can have an enormous impact on their borrowing prospects.

“Many lenders are unwilling to even consider these applicants, while those that do may exclude them from certain processes which mean a faster resolution to the application. That can lead to huge frustration for brokers and clients alike, as they try to navigate these difficulties, which is why we are passionate about handling near prime clients differently at Atom bank.

“Not only do we take a more inclusive approach towards applicants with a credit hiccup, but we also ensure they benefit from the same speedy processes available to prime customers.”

The mortgage market is always evolving, of course, particularly when it comes to regulation and compliance.

“Fostering strong relationships with lenders who prioritise compliance and regulatory adherence is obviously important,” Castling said.

Read more: Atom bank slashes commercial mortgage rates

What are the biggest issues in the housing market?

With a general election edging ever closer, he hopes for a housing minister who stays in the post long-term, rather than the shorter periods which have defined recent tenures.

“There’s no question that we don’t have enough homes in the UK,” he reasoned. “That much has been clear to successive governments, so it would be welcome if greater action could be taken to boost the level of housing stock available to potential buyers.

“Similarly, there is work to be done on facilitating access to affordable mortgage financing. While Atom bank lends up to 95% loan-to-value, we know that it is not always easier for first-time buyers to find financing if they only have a modest deposit.”

Castling has been with Atom bank for eight years, and came to his role with a wealth of experience.

“I have worked in a host of senior roles across financial services businesses in my career, including National Friendly and NatWest,” he shared. “In many of those roles I’ve been tasked with building strong relationships with intermediaries, so over the years I’ve established a good idea of what’s valued by advisers and how financial firms can go further in supporting them.

“I find financial services a really satisfying industry to work in. You get the opportunity to help individuals and families achieve their homeownership dreams, which is really powerful.”

He continued: “It was drummed into me very early on that the importance of recognising the needs of your customers cannot be overstated, and it continues to ring true. The reality is that it’s only by understanding these clients, and what they are hoping to achieve, that you can really build the sort of personalised solutions that will work for them.

“It’s something that is at the heart of how we operate at Atom bank, and why we want to build even stronger relationships with our brokers. Working together, we can ensure that clients are not only truly listened to, but benefit from a better experience when taking out a mortgage.”