Lenders are investing in mortgage hub technology, application programming interfaces, and open banking functionality to increase efficiency and cut costs, according to a mortgage efficiency survey by IRESS.
The financial technology business found APIs in particular are expected to provide the most transformative efficiency gains over the next three to five years. More than half (55 per cent) of lenders are looking at APIs to cut time and costs while half (50 per cent) expect APIs to provide the most transformative efficiency gains over the next three to five years.
IRESS says that by enabling third party services, such as online income verification and electronic valuations, linking directly into lenders’ mortgage platforms, open APIs will reduce re-keying of information and reliance on paper documentation while delivering real-time data validation.
The survey also reveals that consumer demand is driving change in the mortgage market as lenders seek to support customer engagement preferences. The growth in smartphone use has resulted in lenders reviewing mobile services to mortgage applicants and instant messaging for both consumers and intermediaries.
More than eight out of 10 (86 per cent) of lenders have already implemented or are considering offering mobile services to mortgage applicants while more than half (52 per cent) of lenders are actively reviewing, likely to implement, or implementing instant messaging for both consumers and intermediaries.
Almost half (46 per cent) of lenders are also looking at introducing voice activated services following the rise in popularity of devices such as Amazon Echo and Google Home.
IRESS’ principal mortgage consultant Henry Woodcock (pictured) says: “Our 2018 mortgage efficiency survey finds that technology continues to be central to lenders’ efforts to speed up execution and improve service for intermediaries and consumers. Emerging technologies like mortgage hub connectivity, open banking and APIs are driving the market away from stand-alone systems to a more connected mortgage ecosystem, plugging in different systems to create a paper-free straight through process. Greater integration with intermediary software, sourcing services and other third-parties will increase efficiency, reduce risk, remove friction and provide better outcomes for consumers.”