The growth in both the number and complexity of mortgages has been a key driver in the development of sourcing systems as the more complex the products, the more a mortgage adviser needs a system to aggregate and analyse that information.
Recently, the sourcing system has expanded beyond this to provide other business tools to cater for the adviser’s needs for compliance, non-mortgage sales and client management.
More than just a window
The role of the sourcing system has also become far more than just a window to present data to the adviser and now provides the tools by which advisers can analyse that information to allow them to find the best product for the customer.
With tens of thousands of products, the first issue is obviously to help brokers narrow the products to those for which the customer can qualify. The sourcing system in its purest form will certainly compare the customer information gathered in the factfind with the underwriting criteria of the lender.
The more detailed and accurate the factfind, the more refined the list of products returned on the sourcing system. In order to secure more detailed information on the customer, a number of advisers are also accessing information from credit agencies like Equifax, who provide accurate credit information on the customer.
From this initial ‘information gathering’ meeting technology is used to capture pertinent client information. Whereas in recent years this merely facilitated the production of perhaps a standard letter, now this information can be held sacred throughout the entire mortgage advice process and used time after time creating a truly end-to-end system. In spite of what some sceptics say, mortgage intermediaries are not the technophobes that they are stereotyped to be. In fact, mortgage intermediaries have embraced this new electronic world wholeheartedly.
Where once all mortgage applications were paper-based, now most brokers send their applications through online systems. But intermediaries don’t use technology for the sake of technology; they use it because it provides tangible benefits to them and their customers.
Mortgage offers can now be received in minutes rather than days. This allows an adviser to deliver a degree of certainty to their client. It also means clients can leave an adviser’s office secure in the knowledge of the product they can have, what rate it is and which lender is prepared to lend to them. It also benefits the broker given that customers are less likely to continue to shop around for a better deal.
A tremendous enabler
Technology in this regard has become a tremendous ‘enabler’ for mortgage brokers and has certainly carved a place in the daily workings of the busy mortgage adviser. Perhaps the most obvious example of this is the way that data can now be re-used through not just the mortgage sales process but in a range of other ancillary products and programs.
It’s important to pay testament to just how significant this re-use of data can be. With brokers beginning to take advantage of cross sales in areas such as insurance and conveyancing it’s easy to see just how tiresome the inputting of a clients name, address and a raft of other details over and over again.
A collaberative approach
The development of the sourcing system has also been facilitated by a truly collaborative approach to partnerships and integrations. This is particularly apparent in the area of client management systems (CMS).
Mortgage brokers are becoming far more sophisticated in their management of client information and the use of these CMS have increased exponentially over recent years. The link between sourcing systems and CMS systems are also set to flourish in the future as the integrations are made more robust.
Data standards, data security and a shared vision for development is going to be crucial for both parties to deliver ongoing solutions for brokers. The publication of approved integrations, which many systems are now doing, will also generate a renewed sense of confidence in the sector.
Another of the larger developments that has taken place in the sourcing system market is the development of electronic trading with lenders. This area has grown alongside the expansion of the lender’s electronic systems.
Over the past few years, lenders have been competing with each other to provide electronic tools to advisers to assist in the decision making and processing of mortgage applications.
Where prior to this there were only a handful of lenders that could provide electronic submission of applications, today this functionality is almost regarded as a hygiene factor. The battle has moved on to providing more instant decisions and integrations to remove the hassle of re-keying.
Lender integration
As the lender systems have progressed, sourcing systems have also developed integrations with these lenders to allow customer information that has been gathered in the sourcing system to be transmitted to the lender’s electronic systems. This has eliminated the need for the adviser to re-key information that has been previously gathered and enhances the service that can be provided to the customer.
The importance of the integration of lender systems with the sourcing systems can be seen by the movements in the industry to work with a variety of communication standards. The flexibility to work with a variety of standards allows more lender systems to be accessed through a robust single point.
This would achieve the goal of the industry of all advisers being able to reach all lenders electronically saving administration time for both lenders and intermediaries, meaning that more business can be done in less time at lower cost.
Ancillary products
But the mortgage is only one part of the advisers’ relationship with the customer. Over time, mortgage advisers have expanded their relationship with their customer from just mortgages to ancillary products. That adviser might also provide advice on term assurance, buildings and contents insurance, payment protection insurance, pensions, etc.
These products not only allow the adviser to provide more holistic advice to the customer, but also provided the adviser with more revenue opportunities. The sourcing system has also had to adapt to this and provide for this expanded remit. There has been an expansion of the compliance capabilities to take into account these other products, such as the creation of combined initial disclosure documents, incorporation of insurance demands and needs, etc.
Sourcing of these products have typically been left to third party specialist systems with whom the mortgage sourcing systems have integrated. The basic tenet is that information that is gathered in the mortgage sourcing is pre-populated into the third party systems, streamlining the process and eliminating re-keying of information.
With the increase in the number of products the adviser covers, there has been a growing need by the adviser for systems to manage their relationships with the customers. The role of technology is equally valid for industries outside of a regulatory framework.
With or without statutory regulation, professional advisers are looking to provide the highest quality service to their customers and for systems to help them evidence best practice in their client recommendations. Additionally, sourcing systems can either provide or can integrate with CMS tools to better manage the workflow of a broker or packager. Systems in this environment move away from defensive compliance tools into offensive sales processes.
No place for complacency
Sourcing systems have come a long way from simple data repositories to become an integral part of the advisor’s selling, compliance and customer management process.
The host of new products and services have removed the mystic of many process and brought control and power within the brokers’ realm and directly onto their desktop computer. There is certainly no place for complacency from sourcing providers and I believe that this is not the case as can be seen in the recent example of listing fast-track products.
In fairness to the lenders, the distinction between the two products has previously been impossible for them to make within the narrow confines of sourcing system listing. However, lenders can now distinguish between fast-track and self-cert when entering products on some systems, enabling customers to clearly chose which product they want to select.
This will reduce the number of cases that need to be re-sourced and enhance brokers’ compliance with ‘Treating Customers Fairly’ standards.
I believe that 2008 will be the year when technology providers will rise to the challenge to continue to make life easier for intermediaries who supply advise and support to their customers on a variety of mortgage and mortgage-related products.
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