During the past decade, digital innovation in the mortgage market has fallen behind that in other areas of financial services, such as mobile banking.

In response to this, we’ve seen third-party tech providers enter the market promising to deliver innovation that will completely transform the mortgage journey. It has been suggested that robo-advisers will replace intermediaries; Open Banking will bring new transparency and faster pace to the market; and clouds will play home to the data of millions of customers.

Too often the proverbial ‘silver bullet’ tech solutions meet the needs of only a small proportion of the market. Brokers may adopt a new chatbot to accelerate the customer data collection process, but that solution becomes redundant if paper forms are still required by the lender. Some lenders are further ahead than others in the tech race, and a few brokers have improved their front-end digital engagement with customers. However, for the average homebuyer to see any real benefit, digital solutions need to be implemented at every stage of the mortgage journey.

A ‘true’ API

Application programming interfaces are often talked about as the answer to this – a tech solution to faster data sharing throughout the mortgage process. Over the past few years we have seen an abundance of API trials and new pledges to invest in technology.

The actual capabilities of APIs entering the market since then have been underwhelming, however. This is arguably because they are not ‘true’ APIs.

APIs are not just about moving information from one point to another. A truly effective API enables seamless communication between separate IT systems. It works like a universal travel adaptor, connecting the back-end IT infrastructure of one organisation to that of another.

As an example, Mortgage Engine’s API platform connects the decision-making systems of mortgage lenders with the back-office systems of brokers. This enables brokers to pull information directly from their customer relationship management fact-find, rather than have to re-key data for multiple lenders – which can take hours. The API filters the data and delivers it to individual lenders in the format they require. This results in faster decisions, usually within 60 seconds, and provides brokers with a real-time application tracking facility.

True APIs are designed in a way that enables one tech solution to work for multiple parties at different stages of the application process. APIs, like travel adaptors and electrical sockets, can plug in to any system. This is crucial to enable widespread adoption throughout the mortgage process and create tangible benefits for the whole sector.

APIs can be implemented quickly with minimal change, which is what makes them a more realistic first step to digitisation in the market than the myriad other proposed solutions that have fallen by the wayside.

Reducing admin

True APIs have the potential to facilitate a completely streamlined mortgage process. They can enable the automation of tasks that were previously achievable only through manual input and prone to human error.

We expect to see brokers utilising APIs to accelerate digital identity verification and anti-money-laundering checks. APIs could significantly reduce admin for brokers so that they can focus on providing valuable customer advice.

We could also see the concept of Open Finance built via APIs, which would remove steps in the mortgage enrolment process as well as automatically determine customer eligibility for products.

Building trust

However, there is work to be done before the potential of Open Finance can be completely unlocked. Customers have been told for years not to share their banking data with anyone and we cannot expect that mentality to change overnight. The benefits need to be made clearer and the industry must focus on building customer trust.

These visions of a digital mortgage process are not unachievable, but they rely on big industry changes to get it right. APIs that encourage connectivity throughout the mortgage process are key to that.

Cloë Atkinson, managing director, Mortgage Engine