Mark Lowndes is
e-commerce manager at West Brom for Intermediaries
One of the consequences of regulating the mortgage market is that the use of technology by intermediaries has dramatically escalated during the past couple of years.
If life before ‘Mortgage Day’ was characterised by mountains of paperwork, life after ‘Mortgage Day’ is dominated by computers and online systems. Computers are now just as essential for intermediaries as a mobile phone or a car. In fact, it’s probably true to say that without the use of computers, it would be very difficult for mortgage brokers to run efficient, profitable and fully compliant businesses. Although it may be theoretically possible to still run a paper-based office, I doubt there are many brokers who would like to give it a go in this day and age.
Increasing importance
Looking to the future, there is no doubt that technology is going to become even more important. Used properly, technology can improve efficiency, reduce processing times, improve customer service standards and drive down costs for both brokers and lenders. Interestingly, although technology has undoubtedly transferred a portion of lenders workload into brokers’ offices, such as keying-in of mortgage application details, brokers still welcome new technology because of the greater control, certainty and faster turnaround times it gives them at point-of-sale.
There is little doubt, for example, that one of the great benefits of instant point-of-sale offers is that if a client accepts a lender’s offer immediately, the deal is done and the broker can focus on their next new business opportunity. If, on the other hand, a client has to wait a few days for an offer to arrive in the post, then there is time for them to reconsider, change their minds or continue to search for alternative deals elsewhere. The benefits of instant offers are not just for borrowers; brokers are winners too.
West Brom for Intermediaries recently conducted a survey of intermediary usage of technology. It was conducted during the first working week of January with 1,608 intermediaries throughout the UK answering our online survey. The survey was open to any mortgage intermediary – they did not have to do business with us. The sample size is therefore large, which makes the results both robust and significant.
Firstly, we wanted to establish what kind of technology brokers were using and how frequently they used it. Mobility appears to be the name of the game, with 82 per cent of brokers using a laptop. Although the use of Blackberry’s has not caught on yet, with only 4 per cent owning one, PDAs and other hand-held devices are used by 13 per cent and WAP phones by 29 per cent of brokers.
What’s more, technology isn’t just taking over at work, it is also an important part of home life. 36 per cent of brokers own an ipod or MP3 player, 37 per cent have Sat Nav and 30 per cent own an Xbox or Playstation. This point emphasises how technology is starting to influence everything we do.
A love/hate relationship?
When asked whether they love or hate technology (on a scale of one to five), a third said they love it (five on the scale) and 44 per cent are very keen (four on the scale). Only 3 per cent hate or dislike technology, proving that the techo-dinosaurs are a dying, if not dead, breed among brokers.
Broadband is now standard with 96 per cent of brokers connecting to the internet in this way and only 2 per cent continue to rely on a dial-up connection. 2 per cent didn’t know what type of connection they have. What’s more, brokers are spending a lot of time in front of their computers. 30 per cent of intermediaries say they spend more than seven hours a day using a computer; 39 per cent say they spend between five and seven hours and 29 per cent say they use computers for between three and five hours a day. That’s a lot of time in front of a computer screen – far more than we believed would be the case.
When it comes to mortgages, electronic submission is now the preferred method of submitting cases with 58 per cent of brokers submitting more than 75 per cent of their business this way. In addition, 26 per cent submit between 50 per cent and 74 per cent of mortgage cases electronically and 9 per cent submit between 25 per cent and 49 per cent of their business electronically. 3 per cent say they submit 100 per cent of their business electronically. That means that a staggering 96 per cent of brokers submit at least a quarter of all their mortgage business electronically. Indeed, 87 per cent submit more than half of their business electronically. It certainly looks as if paper-based application submission is quickly becoming history.
As far as sourcing systems are concerned, 61 per cent of brokers say they use Trigold, 35 per cent Mortgage Brain and 25 per cent the Mortgage Trading Exchange. 23 per cent also use the Unipass digital certificate system and this is a development which bodies such as the Association of Mortgage Intermediaries and the Intermediary Mortgage Lenders Association (IMLA) would like to see more brokers using in future.
Technology benefit
Do brokers see technology as a benefit and what aspects of technology do they believe is of greatest value? Unsurprisingly, brokers love technology. 93 per cent either agree or strongly agree that technology makes life easier for them. However, brokers are not willing to give up personal support altogether. 35 per cent agree with the statement that they ‘prefer the personal touch’ with 46 per cent neither agreeing nor disagreeing with the statement. Looking at it another way, only 19 per cent would be happy to be entirely dependant on technology with no personal support.
Good websites are vital, with 71 per cent of brokers saying that a good website would make them more likely to use a lender and 40 per cent stating they would like lender systems to be integrated with sourcing engines.
When it comes to separating the ‘must have’ technology from the ‘nice to have’, 80 per cent of you voted for online decisions as a must have. 70 per cent said case-tracking was also essential, with 61 per cent wanting affordability calculators and 52 per cent viewing e-mail updates and alerts as critical. On the ‘nice to have list’ were online valuations (72 per cent), point-of-sale offers (67 per cent), completions (66 per cent), ID checking (63 per cent), proc fee payments (62 per cent), conveyancing (61 per cent), and sourcing engine integration (57 per cent).
At the heart
Without doubt, technology now sits at the very heart of every mortgage brokers business. Brokers have fully embraced new technology and now use it as their primary business tool. They view technology as highly beneficial and want to see more of it and greater integration of technology in the future. Despite that fact that technology creates more workload at the application stage, brokers clearly like the greater control and certainty which technology delivers.
IMLA has also undertaken research looking at the use of technology by intermediaries and its finding support the results generated by our survey. IMLA’s conclusion was that brokers are after quick decisions and efficient and effective information and document transfer between lenders and themselves. Peter Williams, executive director of IMLA, said: “Technology plays an increasingly important role in the mortgage industry and brokers and lenders are increasingly embracing technology to streamline the process, control costs and improve service.”
Lenders are also keen to fuel this technological revolution and all lenders, regardless of size, are looking at ways to enhance their product and service propositions through the increased use of computer and online systems. Technology is therefore the way of the future for both intermediaries and lenders. Whether computers will ever fully replace paper is another issue, but there seems little doubt we will look back at the first decade of the new millennium as the time when the mortgage industry joined the digital revolution.
