The announcement of the Mortgage Charter last week underlined another truism about modern day mortgage lending. Without the agility to amend and record what is going on in operational processes, lenders are likely to get mired in some very costly workarounds that fail to meet the expectations of policy makers and regulators alike.

If it’s not enough that product launch and withdrawal processes are being tested to the limit impacting servicing and margins, how lenders handle distressed borrowers is coming under intense scrutiny.

First of all, for originations and servicing we have Consumer Duty going live on 31 July. Then we have commitments to the Mortgage Charter which include a commitment that borrowers will not be forced to leave their home without their consent unless in exceptional circumstances, in less than a year from their first missed payment.

Furthermore, from 10 July customers approaching the end of a fixed rate deal will have the chance to lock in a deal up to six months ahead. They will also be able to manage their new deal and request a better like-for-like deal with their lender right up until their new term starts, if one is available.

There is of course a lot more and not all lenders will sign up but those that do may need to extend borrowers’ terms to reduce their payments, offer a switch to interest-only payments, or have to hand a range of other options like a temporary payment deferral or part interest-part repayment. The right option will depend on the customer’s circumstances.

But in a new world of Consumer Duty and a focus on borrower outcomes, evidencing that any of this has been handled correctly will become increasingly important. No-one has a crystal ball to know if actions taken now in the best faith will prove to be the right course of action in due course.

Forgiveness of payments do not mean that money is still not owed 12 months later and if deferrals are considered the right course of action, system and processes are needed to evidence how a lender arrived at this decision – particularly if it effectively stores up further trouble for later on.

Systems and processes that can deliver evidence of this decision making in an automated way, go much further than the platforms of the past – and as with all SaaS solutions, implementing them can be quick without breaking the bank. Indeed, a change agreed for one institution can be rolled out to all since all of them will be working within the same regulatory framework.

Technology has for a long time focused its efforts on helping lenders deliver market share more quickly. That is understandable and is still the case. But as we move through the credit cycle the banking platform is of equal regulatory and reputational importance.

Never in mortgage lending in this country has the way in which lenders interact with their current customers come under so much scrutiny. It is a trend that has been in place since the global financial crisis and it is one that governments will continue to lean into if it means voters are protected.

Operational systems need to be more than one dimensional in what they deliver. The front-end, back-end and the records of best practice are all part of that operational considerations now.

Jerry Mulle, UK managing director, Ohpen