First published in Mortgage Introducer, 18 March 2016 - The UK is the global capital for financial technology (FinTech) , an industry worth over £20bn in this country alone. Mortgage brokers are about to discover the improvements that technological advances have already brought to other financial services sectors.
This article first appeared in Mortgage Introducer, 18 March 2016
The UK is the global capital for financial technology (FinTech) , an industry worth over £20bn in this country alone. It is revolutionising the way in which financial services professionals do business, from fund management to retail banking. Every subsector of the industry has the potential to benefit from technology and mortgage lending is the latest industry to feel the advantages. Mortgage brokers are about to discover the improvements that technological advances have already brought to other financial services sectors.
FinTech has the potential to remove a lot of frustrations for mortgage brokers. The property and mortgage markets are highly competitive and house buyers look to their advisers to provide a fast service and help them find the right product for their needs.
However, mortgage intermediaries often lack the key information they need from lenders and are at the mercy of outdated, manual processes. FinTech can help brokers access the information about lending criteria and the case management updates they require in order to provide the service their clients need and expect.
FinTech is central to New Street’s proposition and we expect that brokers will see increasing numbers of lenders following our lead. We have taken a three-pronged approach to harnessing technology to improve the mortgage application process for brokers and their clients.
First, we are using technology to improve the availability of information to brokers. By publishing our full lending criteria online, we are making it easier for brokers to determine whether their clients’ applications will be successful. The availability of detailed packaging guidance is benefiting brokers as well, enabling them to prepare their clients in advance of the application and thus avoiding the need to request further information down the line. We can do this because our proposition is built around providing predictable, automated decisions based on the analysis of our group’s years of experience of originating and servicing mortgages.
We also offer real time case management updates via our secure portal, including underwriters’ notes, so brokers can see instantly the status of their cases from their computer or smart device. This makes us far more predictable to deal with – brokers know in advance whether a case will go through and if not, the reason why.
Second, we are automating our administrative processes to give brokers more control and minimise the time it takes to apply for a mortgage. Where we can, we use data feeds to reduce the amount of information brokers need to key in, and we have put much thought into how we provide information on our website and request it during our application processes. In this we have been greatly assisted by our pilot distribution partners, L&C, John Charcol and the LSL networks of Pink and First Complete, who provided significant feedback as we developed. We offer one-click certification of documents uploaded to our secure online portal. This reduces the administrative burden on brokers and ensures we receive information instantly.
Similarly, valuations are received instantly via an online system. This is a far more efficient process for both us and the brokers who recommend us and we have been delighted by the feedback we have received so far.
Our proposition and use of technology is designed to give brokers more control so they have more influence over the service they give their clients. As well as using technology to reduce information asymmetries by making our decision making predictable and our case management transparent, we also look for opportunities to enable brokers to drive the process.
One of the ways we do this is by allowing brokers to instruct valuations themselves. In combination with our predictable decision making, it allows brokers with tight deadlines to instruct early, giving estate agents and builders more flexibility when pre-qualifying the prospective purchaser.
Intermediaries’ share of mortgage distribution by value passed the 70% mark in 2015 , so it’s crucial that lenders look to make it as easy and transparent as possible for these key partners to do business. FinTech will bring a great deal of positive change to mortgage brokers and the market as a whole, streamlining the lending process and giving intermediaries more confidence that their clients fit the lending criteria. I have seen a great deal of excitement amongst brokers about the wave of change that is on its way and the potential disruption to the slow processes and traditional methods they have had to tolerate to date.
Now, with lending on the increase and the demand for properties rising, surety and speed in the mortgage application can often be the difference between a client securing a property or losing out to another buyer. Above all else, FinTech needs to bring fast, technology driven and consistent mortgage lending that will help brokers to secure the best deal for their clients, as quickly as possible.