Intermediaries are concerned about the accuracy of KFI data while networks and sourcing systems argue whether this data will come from them or from lenders' websites. Against this we have a backdrop of lenders and packagers facing difficulties in coping with the volume of applications. And amidst all this, the industry faces one of its toughest challenges in meeting FSA requirements. The general level of service to the consumer in the mortgage industry is still low and must improve in a regulated market.
The solution lies in integrating the IT systems we already have cheaply so that every packager, intermediary or network can have their own automated mortgage process. We already have good point-of-sales systems, lenders have decision tools on their websites that give a decision in one minute and there are links available to online valuations, credit agencies and legal conveyancing services. We are tantalisingly close to a fully online process but can't make the final move to a fully automated industry. The travel industry can do it and the US mortgage industry can do it, but can the UK mortgage industry do it?
The inherent problem is that it is difficult to get all the IT systems necessary for the full online process to exchange data. Lenders are reluctant to integrate with individual intermediaries as they believe it to be too costly to allow such integration with every Tom, Dick and Charcol.
Trading platforms themselves are in competition for business and are therefore reluctant to share systems and intermediaries are unable to pay the price of proprietary software. Yet if intermediaries are to survive they must be equipped with the tools to give the best in advice, service and compliance to clients. It is in the lenders' interests to make the process more efficient as this is the only way to bring down costs in a regulated market.
Perhaps more action is required from the Council of Mortgage Lenders and the Association of Mortgage Intermediaries to gain a consensus on open data standards that are common across the marketplace. After all, open standards would make it much cheaper to exchange data across IT platforms and this has happened in the past. ORIGO was set up by a number of insurers to provide open data standards in the insurance and investment industry.
In 1998 the CML started a debate on establishing a mortgage trading platform and although unsuccessful, out of it came the creation of Ifonline and since then Mortgage Brain's Mortgage Trading Exchange. A similar initiative by the CML could bring about the common data standards we need.
Post-regulation it is essential that current IT solutions are integrated cost-effectively. This would create a truly integrated online mortgage process from customer enquiry to capital market and make application backlogs, worries about audit trails and compliant KFIs relics of the past.