Mortgage fraud rose by 675% in 2020, from £9.7m to £75m, according to the KPMG Fraud Barometer. And that is just the amount that has reached the courts — the actual number is likely to be far higher.

As a result, the need for good compliance throughout the mortgage process has been heightened as the Financial Conduct Authority takes fraud and compliance issues ever more seriously.

This is all happening at a time when companies are having to get used to doing a lot more compliance — like everything else — remotely. Understandably, this is driving more procedures to be electronic, where previously they may have been paper based.

But it’s not just compliance. Remote working has created a greater need for detailed management information (MI) so that business owners and managers can monitor how their firms and advisers are doing, even with a totally remote workforce.

Although remote compliance checks have been in place at some of the big firms for a while, many smaller companies have had to adapt quickly. Fortunately the technology is there to help them move away from paper files. More tools than ever are available to assist with compliance and MI — and arguably this has also improved the standards by which many of us work.

Real-time information

Traditionally, compliance was often a case of making a file look right after the event. Now there is more and more insight to guide both brokers and compliance managers to ensure that the right advice is being given to the client in real time, and that it is recorded as such.

With many people working from home, it is helpful for business owners, networks, lenders and everyone throughout the advice chain to have that oversight. This is particularly the case for new starters, who have the challenge of learning the ropes remotely, and also for those who have to teach them.

MI in real time helps to nip potential problems in the bud. It can turn things from being a ‘compliance issue’ into a ‘training issue’ by capturing them early. This is arguably more important for the naive than for the criminally minded but, in either case, having a way of ensuring compliance and best advice at every step of the process must be the best outcome for the client.

Prove it

The next challenge is to prove it; to prove that every adviser has provided the best advice at any given time, such as finding the best mortgage product from the best lender. Unless a broker has a completely vanilla client, the best advice is unlikely to be the rate or lender that is topping the best-buy tables that day.

In many cases the lender with the best rate would not be willing to lend to your client, so being able to prove that — by showing evidence of the lenders that will lend to your client at the time you’re providing advice — is invaluable. Having this information time and date stamped, with the broker’s details and the client’s details all stored electronically, has become essential rather than a nice-to-have.

But it doesn’t stop there. Being compliant and proving it are only one part of running a mortgage business. Understanding MI is also key. A practical application of this, using Knowledge Bank MI, for instance, would be for a brokerage to see what kind of business they were marketing themselves as, and compare that to the kinds of enquiry they were receiving from clients. Previously it has not been possible to truly understand this; and in many firms it was, at best, anecdotal.

This type of mortgage information can give genuine insight into how you see your company and how others see it, and any disparity. For greater insight it can then be overlapped with other systems, such as call records, internet leads and referrals, to give the best view of how a broker or lender business is running.

The pandemic has changed the way we work, without a doubt, but the technology that has come to the fore because of this can help to make all our businesses run better, and more successfully, than they did before.

Nicola Firth is chief executive of Knowledge Bank