View more on these topics

Cyber mortgages there for the taking

The technology is ready to drive e-commerce mortgages for clients but the industry is being slow on its uptake. However, it’s only a matter of time before the revolution comes, says Frank Eve

While surfing the BBC website, online consumer spending data provided by market research company Verdict caught my eye. The research reports a 33.4% increase in online shopping last year, a market which is now worth 10.9bn.

Verdict predicts online sales will almost triple over the next five years, with faster and cheaper internet access and growing consumer confidence in the use of online technology identified as the main drivers.

What is puzzling is that the mortgage market seems to be lagging behind. The life and pensions market has a much better record of providing e-commerce facilities for consumers to transact business. Online investors can buy shares, unit trusts, annuities and most classes of insurance.

But trying to buy mortgages online is more difficult. Most internet mortgage activity re-volves around lead generation. A large proportion of consumers browse for information on products and best buys, but when they provide their personal data to get competitive quotes, all too often the information is emailed by lead generation companies to their broker partners to follow cases up over the phone.

Even the most popular websites, such as, provide little in terms of transactional capability. The truth is that the technology to give online borrowers a fast e-commerce experience is available but no-one has grasped the nettle yet.

I have reported before on internet systems that offer consumers interactive presentations of products and comparisons of rates and terms. These can lead to online fact-finds and Key Facts Illustrations. Once borrowers have selected products, most lenders have automated decision systems that can deliver acceptances in principle instantly. These systems could be integrated into consumer-facing mortgage sites to allow borrowers to self-serve.

Online support can be provided by interactive software that allows contact with consultants at any point in the process. Online conveyancing is now well advanced and can provide consumers with information and up-dates on the progress of their mortgages.

So the systems exist but we have yet to see the investment needed to put it all together.

One of the driving factors for change could be the need to reduce distribution costs in the regulated environment. Lenders want to find ways to reduce such costs and are keen to use technology to provide faster services to consumers. Therefore, it won’t be long before we see new initiatives in this area.

So the technology is available to drive a consumer-led e-commerce revolution and the mortgage environment is changing to make this more likely. Those companies that have a clear vision of e-commerce’s potential impact on mortgage transactions will seize the day.


Loft conversions the best way to boost home values

Fitting a new kitchen or bathroom is not the most cost-effective way for consumers to increase their properties’ value, research from GE Money Home Lending has found. It claims these kinds of home im-provements do not increase property values as much as estate agents’ top choice, loft conversions. The research shows carrying out loft conversions […]

Woolwich aims to exploit prime niches

Woolwich is making a marked effort to rejuvenate its position in the lending market and its strategy is showing signs of success.

Crown Equity Release becomes regulated

Crown Equity Release has been regulated by the Financial Services Authority.Mark King, managing director of Crown Equity Release, says: We are delighted to meet the FSAs exacting standards for Home Reversions and are pleased to be able to formally commit to the authoritys guidelines. “We regard FSA regulation as a kitemark of our first-rate customer […]

FSA fines IFA firm Kilminster

The Financial Services Authority has fined Kilminster Financial Management, a network of independent financial advisers, £42,000 for management and complaints handling failings from January 1 2004 to August 23 2006.The regulator ruled that Kilminster, based in Bristol, failed to treat its customers fairly because it was not handling complaints in good time. In addition, it […]

How we’re challenging challenger banks

The bridging market has enjoyed an excellent couple of years and, as a result, has seen a succession of new lenders enter the market. That competition has forced all of us to look carefully at how we price bridging loans. Over the past few months we have spent a lot of time on adjusting the […]


News and expert analysis straight to your inbox

Sign up