The lower cost business model that the intermediary mortgage industry now needs, will rely on internet communication with clients from first enquiry to completion.
Intermediaries who can grasp this opportunity will not only survive, but thrive and dominate the industry for years to come.
Yet, this business model can only work if the mortgage industry can build an integrated e-commerce environment.
By this I mean an environment in which clients can provide data through the internet which is automatically verified and passed through the Point of Sale systems of intermediaries and on to lenders without re-keying.
However, it will take co-ordinated pressure by intermediaries to change perceptions at lenders, product providers and systems suppliers to get the e-commerce environment they need.
Mortgage intermediaries need a comprehensive set of tools to provide their clients with a full range of products that include not only the mortgage product but buildings and contents, accident sickness and unemployment as well as life cover.
There is also the opportunity for mortgage intermediaries to maximise income by providing simple savings, investment and pension products over the internet. However to work effectively, these products also need to be an integrated part of the intermediaries own point of sale system.
Ideally this system should provide a consumer facing web site that will allow clients to provide the data and track their own application through to completion. This will relieve the intermediary to do the things that make money – giving advice to clients.
But how is this utopia to be achieved out of the current chaos and who will provide these online tools at a cost that the average intermediary can afford? For the Appointed Representatives it will require pressure from the networks and for the Directly Authorised the mortgage clubs can play an important role.
This is where the industry needs to work together to ensure that integrations across the industry are speeded up and new technologies deployed.
Setting data standards can help this process enormously, Data Standards are agreed protocols that allow data from one system to be past to another. It is surprising that the intermediary market is not lobbing harder for the same kind of data standard that the Life and Pensions industry has adopted.
This has lead to a thriving e-commerce environment for IFA’s with clients obtaining products and quotations direct from IFA websites.
Origo the non profit standards organisation, has been providing data standards for the life and pensions industry for many years – why can’t this be achieved in the mortgage industry?
For the past two years, Origo has been working with Lenders and intermediaries in its e-mortgage Forum to develop Standards for all the main mortgage functions.
Standards have been developed for most of the main functions in the mortgage process. The pre-offer KFI standard is industry approved and verified.
Agreement in Principle is also in final draft, and industry approved and verified. The full mortgage application has an initial version produced and Origo has produced draft standards for tracking and product data.
The industry has the standards but they have yet to be used. The integrations currently being done are all bespoke and this can raise the costs for the intermediary and reduce choice.
The industry needs some standards implementations to show how costs can be saved and how the ‘build once and use many times’ philosophy can help the industry out of it current problems. Now is the time for intermediaries to lobby for Standards.