When it comes to making good use of technology and improving processes, the mortgage industry has come a long way. Lenders, including the specialist sector, have made big strides, and many brokers have embraced technology and are demanding further development.
So it was with an element of surprise that a report from PricewaterhouseCoopers and the Confederation of British Industry, commented that financial intermediaries as a whole were slow to adapt new technology.
This survey said that financial providers predicted that only one-in-four of their intermediaries would send transaction data via the internet a year from now.
Certainly among mortgage intermediaries, I would challenge this – in fact I would say this is inaccurate.
There has been a huge increase in recent years in the number of brokers transacting business online. This is coupled with the fact that there will doubtless be a number of enhancements from lenders to their online facilities this year.
There is plenty of sound material in the report, not least that it states many consumers prefer transacting through traditional channels such as on the phone and in person. But technology in the mortgage industry should be there to facilitate fast processes and improve the customer experience. For example, this includes intermediaries making greater use of mobile technology so they can work on the go and provide instant quotes and documentation in their clients’ home and offices.
A key driver
Focusing on the mortgage industry as a whole, Frank Eve Consulting Limited, in its annual ‘Lender Intermediary Technology Benchmark Study’, looked at the future development of intermediary technology. It said Financial Services Authority (FSA) regulation was a key driver in the progress made by lenders and brokers.
For example, ‘Treating Customers Fairly’ is essential, but we cannot achieve this if we are inefficient and slow at turning documents around. As this report states: “The provision of efficient systems and instant offer functionality is now critical in helping ensure that intermediaries treat customers fairly. Intermediaries can now consider a lender’s speed and efficiency as well as rate and criteria as part of the advice process.”
There is also strong demand from packagers for bespoke technology and lenders are working with IT providers to offer cutting edge systems – but although competition is positive, there are also areas where there needs to be a co-ordinated approach.
Despite the fact that we have moved on, there is no room for complacency. Brokers still have to access different lenders’ systems and spend far too much time having to re-key information.
We need to see better integration and there is scope for the sourcing systems to do more here through working closely with lenders and also in supporting moves to create a web-based sourcing system.
Working towards common standards
Common standards are vital and Platform is a supporter of the work of Origo along with 17 other lenders – the good news is that at last, there are signs of real progress being made. Pre-offer Key Facts Illustration standards will be available in the near future and agreement-in-principle standards soon to follow. This is an important milestone in getting ‘inter-operability’ of systems underway.
We are also seeing greater use of the Unipass system – a single electronic password will again mean big-time savings. Constantly having to sign in to different lenders’ extranets is a hassle brokers can do without. I think this year we will see a number of lenders adopting Unipass.
There will need to be a corresponding amount of education to ensure more intermediaries both understand and start actively using Unipass.
In the specialist sector, no one needs reminding that margins are being squeezed as a result of a plethora of new entrants. Some of the new players are small operations, but may also benefit from not having legacy systems. But, among the top six providers particularly, there is real pressure to show differentiation and one of the main ways to do this is through technology and service. It is also about providing brokers with ongoing support and training and ensuring that systems are easy to use.
Interestingly, the Frank Eve Consulting 2006 Benchmark Study says many of the latest advances in IT development are being spearheaded by the specialist lending sector. Although the industry as a whole has an interest in common areas, such as automated valuation models, in general, mainstream lenders are more concerned with customer retention.
But simply investing heavily in advanced systems is not enough. We cannot allow our brokers to hit and hope. There are less and less who are feeling excluded, not least because some lenders have made the effort to provide face-to-face training and telephone support.
In recent years, there has been a change in attitude among many brokers. They want to use technology because it helps with speed, accuracy and compliance. Age should not be a barrier – IT is not just there for the children and grandchildren. Lenders must create technology that is inviting to use and no matter what the researchers say, in the mortgage sector, this is happening right now.
