The subject most likely to have intermediaries reaching for the blood pressure pills centres around the thorny subject of lender service, or more specifically, the lack of it. The weekly letters pages of the trade press would not be complete without some horror story that includes the staple ingredients of missing documents, uncommunicative staff, inflexible underwriting requirements having to be met, regardless of whether the lender is at fault, and the inevitable final comment from an obviously angry intermediary that he will never use that particular lender again.
Given the frequency of complaints we see in the press, why is it that I have never actually seen any headlines charting the demise of a UK lender because of poor service? I can think of a number of high profile lenders whose name has been dragged through the mud and been given a regular and sustained kicking in the press and yet they are still there. We live in a world where the free market still thankfully operates and as such the laws of supply and demand are very clear. You can have a great product but if you can’t get that product to market in a timely and efficient way then the customer will go elsewhere. After all, there is certainly no shortage of choice when it comes to lenders.
What is clear is that the experience of brokers dealing with lenders is variable. It stands to reason that if all intermediaries were experiencing the same poor levels of service then no business would go to that lender. Obviously, this is not the case or the gravestones of failed lenders would litter the landscape. The evidence points to, at worst, intermittent problems of service delivery at peak times of demand and those problems are usually worst when a new product is either so well-priced or is so unique in its market segment, that demand outstrips the ability of the lender to deliver it effectively.
Psychology
There are a number of factors that need to be addressed to make service spikes in business a thing of the past. But the primary change that needs to take place is one of attitude. The relationship between lender and intermediary has always been ambivalent, particularly where historically many high-street lenders have not looked to the intermediary market as a prime source of business. Delivery systems designed for use in a customer-facing environment have been forced into service for intermediary business and the fundamental psychology has been that brokers and their customers are not a priority, even though the mortgage business they represent is vital for hitting sales targets. This mindset, which manages to separate the process from the end product, has meant that intermediaries have felt powerless and impotent in the face of bureaucratic muddle and seeming indifference.
High-street lenders are not alone in this and lenders launched specifically targeting intermediaries as a way to market, have also had their problems. The centralised lenders of the late 1980’s, suffered from new business strain as the popularity of the product offerings outstripped the ability to cope with the volume. What they discovered was that the introduction of another market leading product usually restored business flows regardless of how much vitriol had come their way over poor service. Lip service could be paid to ensuring service levels would be improved, but the simple truth was that intermediaries could not afford to ignore good products for their clients, even though they knew that there was likely to be a problem with service. Undoubtedly, there are many introducers who have tried to balance their clients’ wishes for the ‘best’ product with whether the mortgage would actually be delivered on time, but for the majority this has historically not been an option.
Service standards remain woolly and perhaps it is not surprising that expectation among brokers has remained low and even considered to be part of the price of doing business. A damning indictment.
Leaving aside the reasons for poor service, now we can look at what can be done to alleviate the problem. With mortgage product and pricing already pushed to the absolute limits, there is strong evidence that service and its delivery will become the next logical differentiator.
Technology
The paperless, online, end-to-end mortgage application-to-completion system is still some way off, but the adoption of new technology, along with its facilitatory function in bringing compliance to the sales and administration process, has helped to reduce the paper trail, particularly at the start of the mortgage process and the handling of agreements-in-principle (AIPs).
Lenders who wish to capitalise on the use of technology need to better understand how systems can integrate together. The provision of a website with online AIPs, Key Facts Illustrations (KFIs) and application submission, along with the ability to track cases at any time has become a standard to which many more lenders are aspiring. The ability to cut down the number of direct calls from brokers by promoting an online presence and increasing the usability and reliability of access, is a key stage in releasing human resources to more important work and also to help cope in times of greater business volumes. Online services can provide intermediaries with better information on criteria and therefore further cut incoming calls which so debilitate lenders when under pressure from new business spikes.
The human factor
Good lenders recognise the point where technology must give way to people as the ‘soul’ of the business. From the sales teams at the front of the business, to the first contact teams at head office handling incoming enquiries and case updates, the people skills of the staff, not forgetting their technical expertise, is the asset that more lenders need to develop. Intermediary complaints in this sphere usually centre round the ineffectiveness of staff to make a difference if there are problems. The ‘system’ and limitations of responsibility means that in many cases, staff are unable, if not unwilling, to make a difference when there is a crisis. Empowering individuals to be able to take control and even override the ‘system’ to make sure that cases are progressed is an essential part of an ongoing training programme to enfranchise and build the responsibility and authority of staff.
Communication
While not all staff are going to be able to solve problems, particularly where cases are awaiting underwriting decisions, the issue of communicating with intermediaries is of vital importance. While the technology discussed earlier in relation to online case-tracking can reduce the number of incoming calls, the ability and willingness of lenders to give worried intermediaries accurate information about case status, even at the risk of showing there is a problem, ensures that intermediaries are not in the dark. Adequate facilities to offer call backs with new information go a long way to restoring faith and allow intermediaries to feel in control, particularly with their clients.
Intermediary training
Apart from informing mortgage intermediaries about the sales opportunities of the product range, valuable work is done by sales staff to ensure introducers know exactly what to send as far as a packaged case is required. The value of clear and concise instructions, particularly in terms of criteria and supporting paperwork, is often underestimated. Only at times of maximum overload is it recognised that well-written marketing material along with properly trained introducers can make all the difference to business flow at crucial times.
While service can never be perfect, as lenders we can all pay more than lip service to striving to work more closely with intermediary partners to ensure that service levels are maintained and exceeded. Lenders cannot always anticipate the consequences of launching a new product in terms of business overload, but a lot can be done to ensure that intermediaries and their customers are given the right information and training to minimise problems.
Lender investment in key areas of technology and staff training and empowerment to deliver a proper service at all times should be considered of paramount importance. If, as lenders, we lose sight of recognising who our real customers are, then we have no one but ourselves to blame if intermediaries vote with their feet. One day they might not come back.
