So, here we are in 2020. According to many, house price growth is set to be anywhere between 1% and 3% and with UK Finance predicting that gross mortgage lending will fall slightly in 2020, you could be forgiven for thinking that this year will be quite a stagnant one.

But what about Brexit? It’s fair to say that it feels like there is increased confidence in terms of a certainty of direction following Boris Johnson’s successful ‘Get Brexit Done’ campaign. But what actually lies ahead for interest rates, employment and general economic health is still largely uncertain. And of course, there is a UK Budget in March.

With all this in the mix it’s clear to see that there are some large changes that will require not only speed of planning but robust contingency plans as a result of the above. Clearly though, these market ‘drivers for change’ do not stop there.

Execution-only mortgages

The Financial Conduct Authority has pushed back and delayed the findings on its Consultation Paper (CP17/19) regarding execution-only mortgages to later this year – but what could this mean and what opportunities will this bring?

Will this increase competition between products and lenders and give rise to the possibility of a stronger focus on better ‘execution-only customer journeys’? Or perhaps third party providers will start to increasingly integrate earlier into the lenders’ operational and customer facing processes, as those in the market start to duel for increased share in an increasingly differentiated market? Only time will surely tell.

Fees assisted remortgage

In the case of remortgage and the fees assisted market, uncertainty inevitably brings a ‘spikeyness’ to lenders’ volumes throughout the year, as increased competition and a need for responsive changes in product mix from lenders is likely. However, UK Finance Mortgage Trend Data shows remortgage volumes were 5.7% up in November 2019 compared to the same month the previous year. With this in mind our view within Optima is that we will see the signs of this stability continue in 2020.

The one aspect that we know is certain is the drive to mitigate service delivery risk within lenders (and to an extent brokers). The spotlight will surely be on how lenders can mitigate service delivery risk as a result of any interest rate changes or indeed other market changes taking effect.

Volume spikeyness and phasing of instruction and applications will be a key factor to a lenders’ success, and we can expect to see a greater use of technology across the market to help lenders mitigate such risk. The reality is that only by having the required investment needed to achieve greater levels of automation and RPA (Robotic Process Automation), coupled with the right level of legal expertise, support and supervision for the types of cases that require it, will the market ever land on a strong position to support lenders to reach their true aspirations.

Customer journey

Of course, we cannot talk about market aspirations without mentioning a drive for ensuring an increased focus on customer journey management and experience. We could very well see this year an increased focus on how customer journey design and segmentation can achieve greater brand differentiation, not only in the short term, but increasingly viewed through a longer-term lens too.

There will be an increased focus amongst lenders on how to manage and align supply chains to a single ‘on brand’ customer journey, but to also avoid customer confusion and ensure clarity in the mind of the consumer.

The truth is that, with so much uncertainty surrounding all that has been mentioned, 2020 is going to be anything but static, but the year should reveal a whole host of opportunities for lenders, their partners but above all – the consumer. And although it’s fair to say that change in our industry is never quick, 2020 should usher in a real and definitive focus for the market to utilise technology to deliver better business outcomes.

As someone once said: “The pace of change has never been this fast, yet it will never be this slow again”, and we haven’t even had time to talk about robo advice or later life lending.

Optima Legal is a specialist property, recoveries and litigation law firm. For over 30 years Optima has worked in partnership with the UK’s financial services sector, enabling the support of over four million customers through a comprehensive range of legal services including fees assisted remortgaging and later life lending.