Increasing number of lenders now accept applications via APIs: IRESS

A third of lenders now accept applications via APIs into their intermediary online digital platforms — or in the process of implementing this, according to new research.

The annual survey of lenders and intermediaries by fintech business IRESS, highlighted the degree to which digitisation is changing the mortgage market.

In last year’s survey almost half of lenders said these APIs, application programming interfaces, would create opportunities in the market, but now a significant number are investing in this technology. 

The survey also found that the vast majority of lenders, 96 per cent, thought that the Open Banking technology will further improve the mortgage application process for customers over the next two years. In last year’s survey just six out of 10 thought this would have a positive impact on the sector. 

Other key findings shows that both a majority of intermediaries, 60 per cent, and lenders at 72 per cent see robo-advice as an opportunity for future growth.

The survey shows that lenders are increasingly investing in technology solutions: more than nine in 10, 96 per cent, of lenders surveyed now offer case tracking, and 65 per cent now provide tracking in real-time. 

This is an increase on the number of lenders who offered such services a year ago.

However despite these improvement, the survey highlighted how the fact that many intermediaries want these changes to be more widely implement, with many stating that they still have to frequent call lenders to get case updates.

However, intermediaries continue to call for more real-time updates that also include progress with valuations and solicitors, according to IRESS.

Based on intermediary comments, IRESS says there still appears to be a high proportion of lenders in the wider market who do not provide real-time case tracking, and many updates provided online, by email and SMS, are inaccurate or include insufficient detail. 

As a result, phone calls to lenders by intermediaries looking for case updates remains high, with 51 per cent of intermediaries calling lenders four times or more per application and half of all calls, 51 per cent, are to obtain case updates.

The survey also suggests that the features and functions offered varies widely between lenders. Of the 24 lenders assessed, 14 provide three fifths, 58 per cent, of the functionality IRESS describes as ‘best in class’, leaving at least 11 lenders falling short of the intermediary market’s expectations.

In addition, of the 14 lenders meeting elements of intermediary expectations they still fall short in two fifths, 42 per cent, of the areas assessed.

IRESS principal consultant Steve Carruthers says: “Many lenders continue to invest in their portal technology and are seeing benefits in terms of frequency of calls from intermediaries falling and faster approval times.

“However, the research suggests there is a wide gap between best and worst in class in terms of lender functionality, with intermediaries still asking for easier and simpler navigation and phone calls for case updates remain high.”

“Looking forward, digital advice is seen as a growing opportunity with more intermediaries and lenders now expecting it to offer a quicker, more efficient customer experience and help widen and increase distribution.

“Both intermediaries and lenders also believe that continued integration between intermediaries’ CRMs, sourcing systems/aggregators, lenders and third parties such as surveyors and solicitors will be central to the short-term shaping of the mortgage market.”

The Association of Mortgage Intermediaries chief executive Robert Sinclair adds: “The IRESS Intermediary Mortgage survey continues to lift the lid on the evolving use of technology in the market.

“This report allows us to see the developing market in more context as lenders open up more gateways and information to help technology providers improve the broker and customer journey. 

“It is clear from this year’s data that these developments will continue to accelerate over the next two years as consumer demand for quicker, smoother, more informed decisions and transactions are delivered into the property and mortgage markets.”

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