The study – which will be launched in May - has again been developed in consultation with the Council of Mortgage Lenders to provide lenders with a truly independent analysis against an industry benchmark.
Once again the study will benchmark the point of sale and application processing stages of the mortgage process to enable participating lenders to understand their costs of processing, quality of service and levels of productivity and to compare these against their competitors.
However, the 2004 study has been extended to include additional topics: intermediary lending, further advance processing and management of redemptions. It will enable lenders to identify their areas of competitive advantage, increase efficiency and reduce costs while maintaining appropriate service levels.
Last year’s inaugural study suggested that the average costs of mortgage application processing across the industry could be reduced by £81 million per year. Having established an average benchmark figure for application processing of around £116 per case, Marlborough Stirling calculated that lenders following examples of best practice could achieve average processing costs per application of £84 – a cost reduction of 28% for the typical lender in the study.
Whilst this was a powerful key finding from the study, the results also demonstrated how cost is not the only important consideration for mortgage lenders. Quality of service, levels of productivity and speed of processing were also cited as being crucial, and the benchmarking analysis was able to bring these factors together in the analysis for each lender.
A total of fifteen lenders completed the 2003 study and so far 13 have registered interest in participating in this year’s study. Marlborough Stirling is hopeful that the number of lenders will exceed twenty.
Phil Heaton-Jones, head of mortgage product management and consulting at Marlborough Stirling, comments:
“The study is rapidly establishing itself as a vital research tool for mortgage lenders. As this fully independent study enters its second year, lenders will be able to derive the added benefit of tracking its findings against those produced last year. With the introduction of mortgage regulation later this year, lenders are under increasing pressure to ensure that they are performing in line with the rest of the industry across a range of crucial areas such as mortgage application costs and service levels.”
The study
In consultation with the CML, Marlborough Stirling has designed a detailed questionnaire that will enable each lender to supply the required data to benchmark their operation. Throughout the process, a dedicated helpline will be available to support lenders in completing the questionnaire.
Once completed, the data will be fed into a generic mortgage processing model that will enable lenders to evaluate their business costs, quality and productivity against the benchmark. A management report will be produced for each participating lender highlighting strengths, weaknesses, opportunities and threats including innovative yet workable recommendations to add value to their strategic planning process. Additionally, Marlborough Stirling will provide a presentation to each participant’s senior management team highlighting the key findings. Confidentiality of participants’ data will be ensured throughout the process.
If you are interested in finding out more or would like to participate in the Benchmarking Study please contact Chris Darlington on 01242 214 084 or Sarah Jones on 01242 214 277.
