View more on these topics

Long-term benefits of IT investment

Last year saw a flurry of activity as opportunistic lenders and product providers took advantage of the fact that the rapidly growing protection market was non-regulated by investing in e-commerce solutions to automate the sale of non-regulated products.

But in 2004 the mortgage market has a new priority and is faced with a serious deadline. Mortgage regulation comes into force on October 31 and you must either comply or go out of business.

The cost-effective way to survive in the FSA regime is to automate your sales process, either with a full multichannel e-commerce solution or by implementing an incremental solution, channel by channel.

Regulation is the current challenge but a future-proof e-commerce solution must be able to cope with the next market challenge – which will be CP 197/198. As if mortgage regulation was not enough, it is proposed that the mortgage market, along with the rest of the UK financial services industry, will provide the FSA with aggregated data from individual product sales. For the first time the FSA has defined a technical reporting language that lenders must use – XBRL (eXtensible Business Reporting Language).

Change is the only constant in the mortgage market and regulation will never remain still for long so if mortgage lenders intend to make a stand and invest in an e-commerce sales solution for their direct sales or broker networks to support a regulated sales process, it is going to have to be a flexible one. As soon as mortgage regulation comes into play you can be sure there&#39ll be another CP waiting to take centre stage.

The majority of lenders have a sales solution with some degree of automation, whether this be consumer advice via the web, a point of sale solution for a direct sales force or a broker extranet.

However, most are bogged down with legacy systems that have a heavy compliance bias and are hard-coded to specific requirements. These systems were probably great when they were introduced for a specific purpose but are not now able to evolve with the organisation or the industry. Legacy sales solutions are notoriously inflexible, costly to change and built specifically for the requirements of an individual sales channel.

There is never-ending speculation over the future size of the UK mortgage market. In 2003 analysts were predicting a housing market crash similar to that of the late 1980s but the industry tells a different story. In January the Council of Mortgage Lenders issued a press release predicting that UK house prices will rise a further 8% in 2004 and that gross lending will rise by 6%.

The UK mortgage market is attractive and an area worth investing in but the clock is ticking and if lenders want to survive they must act now.

Regulation brings with it a cost burden but by having a solution in place to ensure a compliant sales process for when regulation hits, lenders can avoid having to transfer these costs onto their clients.

Being able to sell mortgages and associated products efficiently will satisfy the demand for one-stop products and provide a better opportunity for intermediaries to cross-sell. And making the sales process more efficient will do no harm to the relationship between lenders and intermediaries, either. If the cost of sale is reduced lenders will be able to transfer the benefits along and offer greater commission.

The tricky part is selecting the right IT partner. So what should lenders look for in an IT company to ensure that they get an automated sales solution that can effortlessly adapt to change?

First, companies will need to choose a partner that can provide a solution quickly to hit the FSA deadline. IT companies that use Rapid Application Development techniques combined with a toolkit approach are more likely to be able to deliver fast solutions.

Ideally the chosen technology partner will be able to access a pre-built library of business components that can be used as the basis for building and deploying a complex array of business processes. If these components are based on XML they can easily be rebranded and reused across another channel such as the internet, intranet or extranet without having to reinvent the wheel.

An XML solution that incorporates style sheet technology will enable a solution to be branded according to the lender&#39s corporate channel requirements. In other words, a mortgage application form on a website can look and feel completely different to that same application as it is sold via a broker network solution.

2004 should be the year when the mortgage market starts to make IT happen. Increased productivity, shorter sales cycles, increased volumes of business, more cross-selling opportunities and reduced administration costs will deliver financial rewards to lenders and intermediaries. October 31 may be the catalyst but the benefits to be achieved from sales automation will go way beyond the initial requirement to comply with FSA mortgage regulation.

Planning a sales automation project

There are a number of criteria that companies should look at when planning a sales automation project:

Speed to market

Time is of the essence but although the October deadline looms ever closer, in Focus&#39 experience it is possible to design, develop and deploy an automated sales solution for a financial services organisation in just three months

Return on investment

It is not unusual for finance directors to demand a 12-month return on investment as a criterion before signing off the budget for a project

Multi-channel deployment

The modern approach to sales automation involves building a single solution that can be deployed across multiple distribution channels, whether online or offline and operating on any technology platform

Incremental development

Component-based solutions can be implemented on an incremental basis depending on the project scope

Ability to differentiate the solution from the competition

A solution that can be developed to specific business requirements rather than an &#39out of the box&#39 solution will enable your solution to be differentiated from the competition

Future-proofing the solution

The solution must be easy to maintain and quick to change providing a system that is flexible enough to adapt in response to future regulatory changes


Saffron Waldon Herts & Essex appoints sales and markeing director

The Saffron Walden Herts & Essex has appointed Andy Golding as its sales and marketing director. Golding has responsibility for the sales and business development areas of the society together with picking up day-to-day responsibility for its marketing and product development. He says: “I believeSaffron Walden Herts & Essex is in an ideal position to […]

Halifax launches cashback mortgage to help FTBs

Halifax has launched a 1% cashback mortgage designed to alleviate the burden of Stamp Duty for first-time-buyers. The product comes on the back of the government&#39s failure to reclassify Stamp Duty bands in last months&#39 budget. With the average cost of property in the UK now over £100,000 it means the majority of first-time-buyers are […]

Don&#39t be fooled by £82,400 price tag, warns Financity

Personal finance website Financity has warned UK borrowers not to be fooled by recent research out from IBM that the average UK adult is worth £82,400. This research takes into account net wealth, including value of your home, savings and contribution schemes. The reason that so many people in the UK are &#39well off&#39 is […]

BDS launches three-year Platform discount

BDS Mortgage Group has launched a non-conforming three-year discount from Platform Home Loans with a bonus discount available on all cases received until the end of May 2004. The product is available exclusively to members of PMPA with a 1% procuration fee to the intermediary. The minimum loan size is £25,001 and Platform&#39s usual underwriting […]


Employer iPMI responsibilities could continue to escalate, says Jelf

New laws in Dubai will put the burden of providing international private medical insurance (iPMI) firmly on the shoulders of the employer in order to maintain the country’s leading healthcare facilities. With 10,000 UK nationals having moved to the country since 2007 and only 16.5 per cent of the total 8.2 million people living there being Emiratis, Jelf Employee Benefits believes this move was inevitable and employer responsibilities could continue to escalate in future.


News and expert analysis straight to your inbox

Sign up