In almost every walk of life, technology means that many ‘run of the mill’ decisions are being made with less human interference. Even before the pandemic, many lenders were moving at pace towards desktop valuations and a greater use of AVMs for lower LTV lending. The pandemic compounded our need for technological support.
But individuals and society are increasingly indebted, and property is not getting cheaper. The launch of government-backed and lenders’ own 95%LTV schemes has already prompted huge demand for physical inspections; any decline is far from linear.
That said, the long-term trend for vanilla lending is more automation. But this poses the question that if everyone follows this path how do you assess the real opportunities that exist at the fringes? How do you avoid becoming a price play if you only offer finance solutions for something everyone else offers?
This is important because surveying is a profession – the outputs of which are relied upon by lenders, brokers and home buyers alike to underpin the most important transaction many of us make.
How we deliver our expertise and experience in an increasingly digital world matters. We live in an experience economy and customers and clients value how they experience brands. It is important that we understand those touchpoints and the different levels of customer interactivity. A wary home-buyer may need a lot of touchpoints, compared with a lender wanting thousands of light-touch valuations.
I believe our opportunity for technology is in the collation of data – not just the application of judgment around that data where nuance, understanding and experience matter. Algorithms work better where risk is low and the variables are few. There are plenty of examples of systems where the wrong input has driven the wrong output and while machines do offer consistency, they often fail mightily at offering nuance and broader understanding.
One example of the new generation of products we are developing is our UK cladding database – designed to inform lenders of the risks (and conversely opportunities) offered by lending on units in residential blocks. Its success rate is over 95% and essentially allows for a desktop appraisal of any block with potentially defective cladding. More data will increase its effectiveness further and we are in the process of improving this by identifying owners too.
The point here is that this kind of proposition delivers information in a way that allows lenders to identify problems as they arise and ones that are already on their back book. The format may have changed but the fundamental knowledge and expertise has not.
The world is littered with disruptive digital ideas that ultimately went nowhere because they did not meet a real need. Understanding how we re-purpose the good that we have, to deliver new products in exciting new ways, is key. Our experience and expertise should be delivered digitally in some areas, and traditionally in others. The appropriate application of digital solutions to meet a direct need will add value rather than create white elephants.
Steve Goodall is managing director of e.surv
