- Microsoft survey finds compliance monitoring dominates
lender’s bid to end mis-selling
- Problem set to escalate as onus shifts to lenders
92% of the 25 leading lenders surveyed for Microsoft stated that meeting the impending mortgage regulation deadline was the most critical problem that they currently faced.
Mortgage Day represents one of the greatest shake-ups in the history of the UK mortgage industry – whereby the Financial Services Authority will officially take over the compulsory regulation of home loans from the Mortgage Compliance Board. Wide reaching in their scope, the regulations will impose new requirements on lender’s IT systems as they seek to ensure that their back-office infrastructure is able to monitor compliance on an ongoing basis.
The aim of the new regulations is to put an end to notorious mortgage mis-selling scandals of the past, and to make it easier for borrowers to compare home loan offers from different lenders. More organisations than expected had managed to adapt existing systems and processes to ensure compliance, however, the majority have had to replace entire systems and platforms.
The Microsoft survey found that in the short term, mortgage lenders had focused on implementing systems that supported regulatory changes rather than to improve efficiency and less than half of the lenders questioned believed that the systems implemented for regulation would bring additional value. However, 46% did say that they could foresee additional value from the updated systems, such as increased process efficiency in the longer term.
Expensive changes to sales collateral have become necessary to meet the new FSA requirements and the sales process will be lengthened from an average of 45 minutes to a new timeframe of 90 minutes., which some have said has served to deny borrowers more value. A 46% majority in the survey argued however that the new regulations could form an important part of measuring the success of implementations and the new FSA regime, citing the Council of Mortgage Lenders and the Financial Services Authority as leading partners in tackling mortgage regulatory issues.
