I recently set up a new business bank account, all through an app, where I scanned my driver’s licence with my phone for proof of ID. No paperwork or anything. Wonderful experience.
In addition, I have just done a DBS check and my ID was checked this time with an online app scanning my passport followed by a selfie. Seconds later, all approved. Again, wonderful experience.
Technology has certainly advanced in recent years and the lockdowns have forced lenders to play catch up.
In fact, someone recently said to me that we are now back to where we were 13 years ago, and there are some elements of truth but not entirely.
We are also seeing new lenders launching with exciting technology offerings. We are seeing brokers investing in their technology offerings.
And we are seeing the technology companies linking with big distributors.
And I was really interested to read Mortgage Introducer’s interview with Cloë Atkinson, managing director at Mortgage Engine, who is setting out to use technology to connect lenders, brokers and consumers.
This is exactly what the industry needs.
It must connect the whole mortgage process to give efficiencies to consumers, brokers and lenders.
Technology Will Create Winners and Losers
Technology is important for everyone in the mortgage market. Consumers are using the internet for significantly more things these days.
The experiences they receive in their every day lives is what they will now expect when it comes to getting a mortgage.
It must be quick and easy to do. If it isn’t, they will find someone who does make it quick and easy.
Having efficient technology will quickly become a hygiene factor. In other words, if your technology is up to expectations, you will get deselected.
Of course, there will always be customer groups and product types that won’t fit into this, but for the masses, technology is pivotal.
Lockdowns have changed the landscape for good. The winners are those that embrace it; losers those that ignore it.
Impact on Lenders
If products are quite similar, then preferred lenders will be those that have invested in technology to make the lives of brokers easier.
I am not just talking about having stand alone technical advancements, but those that connect and talk to a broker’s system.
APIs have been talked about a great deal, but in my view the key is that lenders advance their technology and make it connect.
And then that connection must extend to all parties in the mortgage chain.
Impact on Brokers
Technology is not just about checking ID and smooth mortgage application processes. It also applies in lead generation. One risk here is lenders.
IMLA predicts that 79% of the mortgage market is via intermediaries.
There are many reasons why this is, but one is that it has always been very costly for lenders to target consumers directly.
A simple example of this is TV advertising – it would take millions for a lender to generate good name awareness. But that has changed. And continues to change.
Advances in marketing technology means lenders can target consumers directly, through the likes of Google, Facebook and re-marketing techniques.
Indeed, I have recently been targeted by a large broker centric buy to let lender since visiting their website!
I suspect that we will see more lenders generating more business directly in the very near future, because technology has made it much easier and cost effective to do so.
Panic Not
Clients of course use brokers for many reasons, such as that the mortgage product is full of complexity and jargon and brokers can choose the most suitable product for their client’s circumstances.
Human beings are still crucial in the process.
People said the internet will see the end of the broker; it did not. And the exponential growth in technology today will not see of the broker market either.
But it could have a big impact on those that do not adapt with it because consumers have choices and technology advances outside of the mortgage market is creating higher expectations in the mortgage journey.
Whilst humans are vital, technology will dictate which humans are contacted. The industry is doing some great things with technology.
There are some superb providers of technology. The winners in the future are those embracing technology to connect all the dots of the mortgage application process from client generation to application, completion and repeat business.
