During 2019 we witnessed a highly competitive mortgage market that continued to outperform expectations. Latest Bank of England mortgage lending figures show that net mortgage borrowing by households was £4.0 billion in January. However, these positive figures have been largely achieved via accommodating market conditions, continued government support and by highly competitive rates. In order to fully meet the needs of an evolving and more demanding client base, lenders in the mortgage market still need to undergo further transformation.
When considering a mortgage, in order to attain the most accurate information, consumers expect to interact with knowledgeable advisers utilising highly efficient technology. Furthermore, when seriously considering a financial commitment as large as a mortgage, borrowers understandably seek impartiality and reassurance that the choices they make are correct. The Council of Mortgage Lenders (now part of UK Finance) research paper, ‘Digital Change and Mortgage Borrowers’, highlighted that consumers want a variety of things from their mortgage process, with a choice of interaction methods a clear need.
So, in order to remain competitive and to meet these demands, providers must not only concentrate on products, but also provide customers with a frictionless mortgage experience. Improvements in customer onboarding that have already provided positive results in other financial verticals such as insurance, can allow customers and lenders to improve pre-application levels.
In order to regain more profitable margins some lenders have shifted their focus to better meet the needs of borrowers in under-served areas, such as complex incomes, mortgage prisoners, the self-employed and equity release. To assist lenders, technology platforms can enable policy and rule changes alongside business-as-usual amendments. Improvements must be made in the fields of engagement and cross-communication with all parties involved in the mortgage chain. In short, lenders need to make themselves more accessible to brokers, clients, valuers and conveyancers.
While many lenders are still coming to terms with making real progress in digital transformation, they must identify the areas in their operations that are the least efficient. It is only through addressing these challenges and retaining high-quality engagement with customers that they will achieve success moving forward. Utilising a technology platform that consolidates multiple solutions and cuts down on the number of manual touch points is a win-win for any mortgage lender.
The mortgage sector will continue to be shaped by digital and data-driven innovation, with the expectations and demands of customers and brokers, continuing to accelerate. The increasing pace of new technology means lenders must adapt faster than ever before to provide an automated and streamlined process that not only improves operational efficiency and reduces costs, but also provides the positive experience that keeps customers engaged. Implementation of digitalisation will improve customer onboarding, reduce acquisition costs and increase adviser capacity and productivity.
Ultimately, borrowers will select lenders based on how they operate and how they think. Lenders that use technology to differentiate and improve the customer experience will be the ones that ultimately come out ahead.
