Lenders must scrap paper and move online

From March 1, Bank of Scotland became the latest lender to stop accepting paper-based applications.

Alliance & Leicester was the first to make the move in August 2004, having launched its intermediary online trading system in 2001.

BM Solutions was the first lender in the specialist intermediary market to follow suit, having driven up its online applications to over 90% in a relatively short period through increased proc fee bonuses for online applications.

Despite this, you can still speak to intermediaries that resist technology and defend manual paper applications for dear life.

While customer choice is important, there are dangers for advisers who do not adopt the online process. More and more lenders are becoming electronic-only so clients may be disadvantaged if they are not offered a whole of market panel.

At one time it was believed that the Mortgage Trading Exchange would provide this sort of online facility.

However, a quick look at the lenders that have launched their own online access platforms in the past month or so shows this is not the case. These include Bank of Ireland, Nationwide and UCB Homeloans.

Most of the new entrants such as edeus come packaged with online solutions only. Companies without online facilities by the end of the year will lose touch with the market.

Indeed, intermediaries are looking forward to the likes of Woolwich launching their own online platforms, as they know they will receive a boost in service from the lenders to back up their aggressive product strategies.

So, how can I persuade intermediaries who are yet to be convinced of the value of online solutions? There are plenty of advantages on offer.

First, many lenders pay enhanced commissions for online cases. Most online systems are integrated with decision in principle facilities and so offer an integrated service that provides fast decisions for clients.

Enhanced facilities such as 24-hour case tracking are often linked to the online process, as are certain service standards. Last but by no means least, online provides an audit trail for compliance purposes.

But it doesn’t stop there. Distributors are already working on integration between their back office systems and lenders’ technology. This will lead to quicker service for clients and produce major advantages for advisers, lenders and distributors alike. Now is not the time to be playing catch-up. The benefits that will be missed by not going online will disadvantage clients as well as Luddite firms.

So, as more packagers move towards developing online solutions, lenders will offer exclusive products with en-hanced fees for online submissions. Advisers will gain value from service enhancements and the extra efficiency that electronic applications deliver.

It is inevitable that the market will be pushed towards an online trading environment. Lenders that accept paper applications will soon become the exception rather than the rule.