In my regular conversations and work with systems providers, it is becoming clear that the vast majority have never experienced so much interest in the market in upgrading operational delivery. Everyone, it seems, has a strong pipeline or full order book.  

Lenders are looking to invest and upgrade but in the background some changes to the regulatory framework surrounding out-sourcing have come into effect. They apply to all UK banks and building societies (as well as other types of PRA regulated entities) and came into effect on Thursday 31 March 2022. They set the regulator’s expectations of firms to maintain important business services when outsourcing or using third party providers. They matter because, as we can see, the level of activity and demand in the market for outsourced support is clearly increasing. Record earnings over the past year for many smaller lenders have meant there is now a window to upgrade and improve their technology platforms and digital capabilities. In many cases they will turn to third party outsourcers to improve their propositions and operational models. Some of them (and many suppliers for that matter) may well be less aware of these changes than they ought. 

The pandemic has hard wired remote and digital solutions into our working and consumer lives. Brokers and consumers have embraced hybrid solutions, which have accelerated lenders’ need for digital excellence in mortgage application processing, onboarding, and servicing. The current market is also highlighting the importance of agility. We have all heard tales of lenders who have withdrawn from the market to protect margins and service as rising interest rates have caught them out. Agility of mind and action are now prerequisites of effective lending and the accompanying growth of cloud technology, in part a result of the pandemic, has meant many institutions not previously able to make these kinds of upgrades now have access to scalable, agile, and robust solutions.  

All of this, of course, invariably means working with technology and data partners. Choosing wisely and getting what you and they require out of a commercial arrangement means developing an in-depth understanding of the commercial and regulatory requirements of all parties to realise the real business benefits.  

This also means that whether you are insourcing or out-sourcing, mortgage lenders of all types must comply with the PRA’s SS2/21regulatory changes. They reinforce the themes in the Operational Resilience Statement that firms should plan for and minimise disruption to services. Failing to observe these has already cost one bank just short of £2bn pounds.  

We are very familiar with these requirements and can ensure you do not fall foul of them too. From assessing internal and external supplier risk (which includes sub-outsourcing), to revised requirements for governance and record-keeping to the negotiation and recording of the actual outsourcing agreements, – or from data security to access and continuity and exit plans – we have the experience to ensure your aspirations actually do become a business reality.   

After all, no-one wants to see their dreams of a new operating landscape become a regulatory nightmare.