Service is key in any industry and is often a benchmark to the success of a company. It is unlikely that customers will turn to firms that have a bad reputation for service and those that can claim, and back up good standards will undoubtedly reap the benefits in whatever line of work they are in. Be it a supermarket chain such as Waitrose, or Sainsbury’s, or a small, independent shop offering a unique product, service is paramount. With this in mind, the findings of recent research from mform.co.uk has come as somewhat of a surprise to the mortgage industry. Despite improvements to the way the mortgage market is formed, primarily as a result of regulation, the research indicated that borrowers expect more from lenders in handling their mortgage applications.
Improving the dialogue
With a greater focus on business practices and complying with Financial Services Authority (FSA) rulings, brokers and lenders alike need to make sure any time they spend with customers is well managed. Time issues have become a growing concern for those in the industry, but, according to mform.co.uk’s research, lenders should do more to inform customers about the state of their mortgage application, with an emphasis on improving the dialogue between all of those involved in the process.
mform.co.uk revealed that the extent to which borrowers had been kept informed about their applications had received the lowest score of mortgage criteria, obtaining a 67.6 per cent satisfaction score from borrowers. This result was the lowest out of 16 service measurements rated. Francis Ghiloni, marketing and business development director at mform.co.uk, said: “Service levels are generally good in the mortgage industry and lenders are to be congratulated on the work they have done to make the application process as smooth as possible.
“However, inevitably some customers are unhappy with the service they receive and lenders will want to address these issues. It appears customers are most unhappy about the extent to which they are kept informed on their mortgage application.”
Ghiloni added that service was paramount to the success of any organisation, including mortgage lenders. “Service is a vital part of the mortgage application process. A market leading rate is devalued if customers struggle to make applications or become frustrated during the application process.”
High level of satisfaction
However, following on from concerns as to the state of applications and how well informed borrowers were kept, 80 per cent were satisfied at the end of the proceedings about the extent to which the mortgage funds cleared on time. The speed to which mortgage funds were made available also received a high satisfaction rating.
Tamsin Hemsley, PR manager at Nationwide Building Society, admitted that lenders had done more to improve the dialogue between themselves and intermediaries. She argued that a number of lenders had improved their dialogue with customers following feedback, and had launched systems to streamline the application process, making it much more transparent. She explained: “Nationwide’s decision-in-principle and case-tracking process is simple. If a broker chooses to advance the application through e-trading, we can offer an agreement-in-principle or decline automatically. Presently, intermediaries can register for case-tracking and they will be kept updated by SMS text message or e-mail. This is a system that works well but we appreciate that intermediaries would like the opportunity to track a case through e-trading and this is a facility we are working on. If a mortgage intermediary submits a case outside of e-trading, we aim to give an agreement-in-principle within two working days.”
The final answer
However Hugh Nichols, partner at Badbury Berkeley Financial Services, suggested that keeping borrowers’ up-to-date with how the application was going was not the biggest concern. He said: “Most clients just want to know when the application has been processed. They don’t want to receive a telephone call every day telling them at what stage the application is. They just want to know the final answer.”
He added: “Borrowers employ me to deal with any hitches and to check when the application is finalised. Most of them would not understand what I was talking about if I told them every step of the process. They would probably get annoyed if I was ringing them every day to tell them that something had, or had not, been done.”
It is clear that in an increasingly competitive market, the level of service given to consumers, and mortgage intermediaries, will remain top of the agenda. While low rates are sure to attract attention, unless this is backed up by good prompt service, the organisation will suffer. While the industry as a whole has made rapid improvements over recent times, the research from mform.co.uk confirmed that there is much still to do.
