The mortgage industry is just one of many trade sectors not immune to adopting and discarding fads ostensibly at will. Green mortgages, for example, appeared with good intentions not so long ago, along with a wave of eco-friendly discourse in the media in other areas of life. David Cameron – when not mistaken for a plumber by Kate Moss, or found riding a bicycle in front of a chauffer-driven car or swapping a Toyota Prius for a petrol-thirsty Lexus – promised a ‘green revolution’ which set the ball rolling for a haze of non-reform in parliament, industry and society alike. But since the coming of the immortal credit crunch, the green trend has seemingly disappeared as lenders’ margins tighten and borrowers prioritise bank balances over carbon footprints.
Another fad since the tightening of the markets has come in the form of many networks, lenders and distributors purporting to be shining beacons of technological wizardry; the focus of marketing activity has, in the main in this period, shifted from product and price-driven strategies to service, and in particular new technology offerings. Indeed, this year’s Mortgage Business Expo at Earls Court 2 in London has a host of companies displaying their new systems as the main focal point of their proposition – which is all fine and dandy – but when the smoke clears from the credit crunch, and everyone has launched a new system that integrates with all other systems, how are we to differentiate propositions? Surely this cannot be the sole determining factor of a firm’s output, but flicking through the trade press, you’re hard pushed to find an advert that reveals much more of late. Origination of business should still be the key driving aspect to a company’s output when the market returns.
Marketing convenience
Of course, we live in an age that demands more than ever, quicker than ever. News broke last year that Heinz is piloting in New Zealand a frozen, fused sandwich that goes in the toaster, containing none other than frozen beans and frozen bread – beans on toast, to you and I. Although I don’t consider myself a culinary genius a la Gordon Ramsay, I do reckon I can whip up a cracking plate of fresh beans on toast once in a while with a minimum of fuss, without breaking a sweat or anything. Whatever our Kiwi friends make of it, I don’t think I’ll be investing. How much more convenience can you market I wonder?
Technology also has the ability to take speed and convenience to new levels. Whatever mortgage intermediaries can utilise to speed up their working lives and the house buying process for their clients definitely deserves investigation, and our industry has perhaps in the past been guilty of being a little slow on the uptake. However, the Intermediary Mortgage Lenders Association (IMLA) revealed in 2006 that 55 per cent of brokers submitted over half of their applications online in 2006 – a surefire sign that technology is being harnessed more and outdated methods are being readily phased out.
Impact of regulation
Regulation in no small part has bought with it the need for auditable information at every stage of the mortgage application process. Back office systems enable the intermediary to keep an accurate record of their client dealings to adhere to regulatory duties as well as improving the efficiency and speed; re-keying of data, for example, can be eliminated, and if the intermediary is using a packager, should the application be turned down with one lender then this information can be used in the application with another lender. Multiple cascading systems through various lenders also eliminate the idea that a broker would rely on inferior products for an easier service. The broker now only needs one form, and these can be fired off to multiple lenders, encouraging not only competition in the marketplace, but also lets the system do the work and enables the broker to make the final decision on where the product is sourced. In turn, lender propositions also need to fall in line with systems integration as more compliant offerings are sought.
The same can be seen with Mortgage Brain’s Mortgage Trading Exchange and Trigold’s Electronic Trading Centre. Generic applications can now be sent electronically, ensuring client data is sourced and pre-populated into an application form, ensuring re-keying data isn’t necessary. In integrating with these trading platforms, firms can receive the application in seconds into a back office system, meaning both client and adviser benefit from efficient transfer of information. Paperwork has been eliminated altogether from this system and is ready to go to the underwriter, where in the past this would have taken days to reach the underwriter – also a godsend in times when our post is not guaranteed to be delivered any week of the year. This is certainly one area that technology has improved drastically the lives of mortgage intermediaries who are using these systems.
Development in technology also can take this process a step further. Our own system, Vision Mortgage Software, will in its final stage yet to be rolled out, essentially allow the user to shift data from one application to another and replication of data will not be necessary. The built in sourcing system will allow data retrieved to be entered automatically into a fact find, so the broker is one step ahead in beginning the application process. Measures such as this can save valuable time in the process whilst at the same time eliminate errors that might occur on the way, assuming the data is entered correctly in the first place that is.
Automated valuations
Automated valuation models have been a hot topic of debate in the industry when talking about the adoption of technology in recent times, and many lenders are at pains to fully commit to their use. Of course, for abnormal or specialist properties their use is limited, and at the moment lenders tend to use the AVM as a method of churning out lower loan-to-value mortgages and very mainstream products. But this is definitely becoming a more accepted part of the process, and as a larger database of information about the nature of a bigger pool of properties becomes available, it will be possible for the industry to place more faith and confidence in the results given by AVMs. Giving the option of a surveyed property or AVM also enables the power to be given to the client, and therefore the full power of technology passed on to the consumer.
The downside
Technology has bought with it speed and efficiency in the mortgage industry – but what have we lost as a result? Gone are the days when most lenders and providers had dozens of business development managers around to provide support and training to intermediaries, and this is due in part to the impact of technology in many areas of the industry. Online and telephone support has in many cases replaced face-to-face advice, and we must be mindful of the fact that our industry has been built on being a people’s business, successfully so far, as technology begins to touch every area.
Useful developments
This, however, is not to say that the mortgage industry should not look into adopting technological processes – for example, IFAs operating in the life and pensions market have been utilising electronic identity checks to considerably reduce the time and money they have to spend on conducting anti-money laundering procedures, while at the same time improving the service offered to the client. The checks can be performed in seconds and reduce the need for tangible documents to be dealt with, and I expect to see our industry adopt similar widespread procedures.
In summary, it’s important that we as an industry begin to adopt new technological procedures to improve the speed and efficiency of service to the client and working life of the intermediary. But remember that we are still a people’s industry, based on the principles of face-to-face advice and offering the client a personal service. Technology can help us in every area of business, but it’s maintaining the personal touch that determines the success of an application.
