Agile product processes are not an optional extra for lenders

If lenders who are planning to re-platform thought they had time on their side, the recent charge of inflation and its consequent impact on the lending process and the systems supporting it has shown this is not the case. As legacy systems, already in too many instances under-supported and overpriced, fail to deliver, many lenders are looking for the next generation of technology that will cost-effectively support their operating models of the future.

Change is coming thick and fast. The recent announcement of the withdrawal of the PRA’s stress test on affordability may be welcome but it is just one change among many in an evolving landscape that will require lenders to be swift of thought and deed when it comes to systems, processes, and delivery.

Excellence in operational delivery is key when all around you is moving quickly and it is safe to say that legacy tech struggles to keep pace at the best of times. No surprise then that so many lenders are talking to us about what their next move should be, when, and how to deliver it.

If anyone needed reminding of how fraught it is out there at the moment, at the time of writing, the average product life of a mortgage product is around 21 days. This alone is testing pieces of the mortgage process that have, for some years for many lenders, laid relatively idle.  ONS data is no longer cutting it for many, and algorithms are being overlaid to address the concerns over the rising cost of living. Affordability calculators, often standalone from processing platforms until their functionality appears again at the Agreement in Principle stage of application, are being altered. Patches, fixes, make-do, and mend alterations are order of the day for many.

Processes around product launches and withdrawals are undergoing stress too. Tales abound of lenders finding themselves exposed at the top of best buy tables, suffering the subsequent if predictable pressures on servicing as distributors try to lock in pricing, and haemorrhaging margins which cannot be repaired as new products demand operational capacity soaked up by the aforementioned late withdrawal. The margin hit could, in some cases be greater than the cost of fixing a dodgy product launch process if lenders don’t have their wits about them.

Agility is the order of the day. But how to deliver it? You may not be surprised that we have a process for helping. We are constantly helping organisations that face unacceptable daily risk and excess cost of support that hampers their ability to deliver better digital services to the business, its distributors and end customers. Significant process duplication and complexity mean we help lenders map their business capabilities and propose an architecture roadmap that allows sensible phasing of digital transformations.

Many lenders already a long way down the road of replacing legacy tech are pausing for thought as they try to understand which bits of the process, they need to fix first. No amount of slick servicing will protect lenders from clunky product launch and withdrawal processes. Understanding the issue, its consequences and the appropriate solution for your business is imperative if you are to make the right longer-term solution for the business.

Our approach is uncomplicated, but it deals with the complex. By conducting capability assessments highlighting where most improvement could be delivered, constructing process maps across different delivery channels, identifying the right target architectures for change and delivering benefit roadmaps that show cost impacts in both IT and Business Units, we help clients get to the heart of what is wrong and offer a pathway to something so much better.  Bridging the business and tech gap means understanding the business problem you are going to fix with the appropriate tech solution.

Agility is about delivering the right solutions that make a difference quickly. If your view of what you need is changing, get in touch because we know how to help you do that. The tide may not turn but it does not need to make for harder sailing.

Rob WalkerDirector, Coeus Consulting