Suggestions that the mortgage industry has only paid lip service to digitalisation do a disservice to the huge strides taken by the sector over the last year.
Technology was adopted at an unprecedented rate throughout the ongoing global health crisis and, quite simply, kept the mortgage industry going.
The transition has not only been necessary but also widely successful, so much so that research from Cushman & Wakefield suggests that ‘hybrid’ working (which blends remote and office-based work) is expected to more than double going forward, even after the end of the pandemic.
2020 was a milestone year for the digitalisation of the mortgage industry and our successes should be celebrated, not scorned.
2020: The market embraces digitalisation
Digital automations and improvements were rapidly adopted as the impact of the pandemic spread and have since allowed brokers to reduce the capacity spent on time-consuming admin tasks, leaving them with more time to progress applications.
This move to digital-based mortgage work was forced upon the majority of the industry last year, but online forms of communication have remained essential to both the survival of the sector at the onset of the crisis and the recovery that has followed.
Thousands of applications have been saved from stalling or falling through and this is reflected in high activity levels, as the ONS recorded 121,640 UK residential transactions in January 2021 alone.
As well as online communication, advisers have enjoyed introducing digital application tracking, online fact finds and interactive calculators to their list of services.
Smartr365 has gone one step further by introducing various integrations including a partnership with Digidentity for leading digital ID verification, a single sign-in feature with Legal & General Mortgage Club and real-time mortgage DIP submissions with Halifax Intermediaries.
Earlier in March Smartr365 also introduced the industry-first HomeBuyer app which allows customers to scan a QR code or Near-Field Communication (NFC) chip, in an estate agent window or on a property search site for example, before automatically and remotely sharing their details with a mortgage broker to begin the application process.
The industry has undoubtedly made huge headway in online spaces over the last year and the development has been so seamless that one buyer even reported being able to complete their mortgage application entirely through online instant messaging.
Such developments cut inefficiencies for both broker and buyer, meaning that it has never been easier to buy a house from home. Therefore, though the move to digital spaces was necessary in 2020, it should be an area that we readily explore further as we begin to plan our improved ‘new normal’.
2021: Digitalisation becomes the future
Though digitalisation took big strides in 2020, it should become a central part of the market’s future in 2021, which is predicted to be another financially challenging year for many.
In the UK, findings suggest that over 11 million jobs have been protected by the Coronavirus Job Retention Scheme, while the Bank of England has also found that 28% of UK households have suffered a loss of income as a result of COVID-19.
Such changes are directly reflected in the mortgage market, with Legal & General Mortgage Club’s SmartrCriteria search results indicating that searches for furlough-friendly mortgages grew by 230% in January.
In addition, thousands of two and five-year fixed rate mortgages are set to mature in 2021, with some reports suggesting that this figure could be as high as 700,000. The circumstances of these borrowers may well have changed significantly since they began their purchase journey many years ago, meaning that many will be looking for fresh advice around product transfers.
Digital tools not only seamlessly connect brokers to this growing number of borrowers, but also cut inefficiencies once these relationships have been formed. Smartr365’s industry-first homebuying app and integration with Microsoft to bring audio and video calls to the end-to-end platform ensure that all parties remain effortlessly connected and supported throughout the mortgage journey.
Meanwhile, the boost to efficiency that features like automated DIPs and digital ID verification provide is also becoming increasingly crucial to advisors as they attempt to tackle this rise in lengthy and complex cases.
This strong digital support system means that brokers that use the Smartr365 platform are 2.5 times more likely to retain business when compared with rival brokers, enjoying 85% retention against an industry average of just 30%. As such, time is of the essence and we must continue to implement valuable time-saving digital features if we are to help the growing number of struggling individuals.
It is important that we build on the momentum of last year and continue our work to transform our presence in the online world, with many further benefits potentially yet to be discovered. It is reassuring to see the Chancellor Rishi Sunak share this sentiment in the latest Budget, where he pledged to provide free online technology advice and 50% discounts on the cost of approved software, up to the price of £5,000, through a new Help to Grow: Digital programme.
The programme is set to help SMEs increase sales, build customer relationships, and manage their finances digitally when it comes into effect in the autumn. Smaller brokers should look to take advantage of this scheme if they want to keep up with the pace of transformation that we are currently witnessing in the mortgage sector and help assist customers with increasingly complex cases.
It is therefore unjust and untrue to say that the mortgage industry has paid lip service to digitalisation over recent months when it has taken significant strides in its integration with the online world.
With mortgage professionals now using online verification methods and application trackers to take clients through the mortgage journey from their digitally-enabled home set-ups, the days of paper-based applications that are signed in in-person meetings are clearly long gone.
Though the transition to online spaces was an imposed necessity in 2020, it should be an area that we willingly further explore in 2021 if we are to pave the way for a smarter, more efficient future.
Conor Murphy is CEO of Smartr365
