Badly designed tech helps nobody, writes Tolfree

When designing an online system, lenders must think more about their broker customers than their own efficiencies

Technology has become an integral part of the service offering of most mortgage lenders, with paper-based applications heading for extinction. However, if conversations with brokers are anything to go by, some of the ‘fintech’ intended to replace the dinosaurs is just as much of a barrier to business.

Problems with online application systems and portals can be serious issues for intermediaries who use them every day. This topic has been discussed a lot recently and the same conclusions reached: the offenders ask too many questions and want too much information at the outset.

But hang on – shouldn’t lenders be asking lots of questions? Was it not that kind of laissez-faire attitude that got us into the credit crunch 10 years ago?

Well, yes and no. Yes, lenders should ask the important questions as soon as possible. There is no point wasting a customer’s, broker’s or underwriter’s time if the borrower does not have a hope of being accepted.

But using a broker’s time to gather and input incidental information that has no bearing on affordability – such as employer contact details or the property’s past purchase price (all of which can be found on other sources during underwriting) – will not win you any fans and makes no difference to the quality of the lending decision.

When designing an online system, it is easy to think: ‘Well, if we’re asking that, let’s ask this too. It’ll save doing it later.’

But companies offering a service like that are not really thinking about their broker customers; they are thinking about their own efficiencies.

So, what of the future? There is no disputing that technology has transformed the mortgage industry, but there are plenty of new developments and benefits still to come.

Many larger brokers have their own application system and being able to integrate it with those of lenders, to avoid time-consuming rekeying of information, is vital.

Buster Tolfree is commercial director, mortgages, at United Trust Bank