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Lenders should focus on service, not sales, says CML chairman

Martijn Van der Heijden, chairman of the Council of Mortgage Lenders, has told lenders that they need to have less of a sales culture and more of a service culture.

Speaking at the CML annual lunch in London today, Van der Heijden, who is also head of lending at HSBC, told attendees that before the credit crunch mortgage lending sleepwalked into becoming more of a sales culture.

He told the audience: “I think we have to get more honest, more transparent, more intelligible, to our customers. More importantly, we need to make a true cultural shift from a sales culture, to a service culture.

“Somehow, after deregulation but before the credit crunch, mortgage lending sleepwalked into becoming a commoditised sales business rather than a true customer relationship business.”

He added: “While working with great respect with the other professionals in the mortgage chain – conveyancers, surveyors, insurers, intermediaries, panel managers and the rest – we must take to heart that we are the ones with the long-term customer relationship, and its attendant risks and rewards.

“We need to take responsibility for that relationship, irrespective of our distribution model or preferences. It might even be better business for us in the long run than the old cat-and-mouse game of churn, resulting in a constant merry-go-round of poaching each other’s customers that ended up giving us the borrowers we deserved, motivated more by price than by service. Loyalty works both ways.”

In May 2009, Michael Coogan, the former director-general of the CML, famously made the comment that, “some brokers acted more like sales people interested in cash-flow rather than the customer’s interests.”

Van der Heijden also used the event to question whether the bridging sector is fit for purpose.

He says while lenders should defend their turf against regulatory excess, they should also step in when attempts are being made to avoid regulation.

He told attendees: “We should support efforts to identify areas where there are attempts to circumvent rules and allow poor lending to slip through the net.

“While there are undoubtedly some good lenders in it, is the bridging and short-term lending market at the moment universally truly fit for purpose, for example?

“Would it benefit from regulatory scrutiny, and would it really damage us to say so?”

He also commented on how the mass of regulation on the mortgage market right now is stifling lenders’ ability to develop innovative products.

As a result of the Mortgage Market Review, he says the vast bulk of its IT resource is devoted to developing regulatory systems, which is squeezing its ability to use these resources for developments that its customers might benefit from.



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  • GHU 25th June 2012 at 10:48 am

    Didn’t I hear similar comments in 1994 – amazing how quickly this will be forgotten and the whole sales and marketing culture will resume it’s grisly way forward.

  • Glen McKeown 22nd June 2012 at 3:14 pm

    I don’t think there is much in the Chairman’s reported speech to which one would object, other than the fact that it is obviously very two faced.
    This is the Council of Mortgages Lenders breast beating after the event. Why were they not implementing all these sanctimonious propositions before the credit crunch? Why was there so little discipline leading up to the credit crunch?
    There is no point crying about the impact of regulation now when nothing was done before hand. If nothing else the Mortgage Lenders had the example of the rest of the financial industry to follow, yet obviously failed to understand anything that was going on. Merely bending with the prevailing wind does not portray any evidence of back bone or real commitment.
    Service and selling should go hand in hand. If there is any doubt about that read Schumpeter in The Economist [16Jun12] that highlights the problem of concentrating solely on one characteristic.
    And why does the CML want somebody else to take responsibility for the regulation of bridging finance. It’s the fact that they cannot take responsibility for the activities of their industry that requires an outside agency to step in – and then over regulate.
    Has anyone asked consumers whether they want a sales environment, a service environment or merely a professional approach to mortgage lending.

  • Ian Camp 22nd June 2012 at 2:35 pm

    The CML chairman is right that the whole culture needs to change, especially the commoditisation of people in the service departments by the major banks where cost cutting is made to pay for the excesses of those so called golden boys and girls in their trading departments. Loyalty is a 2 way street and until the banks start to show some loyalty to their staff and invest in them, standards of service will continue to be below an acceptable level. Brokers also need to be more professional and submit all cases with full and accurate documentation in a timely manner. Some lenders also need to prune the amount of mortgage options as their is no need to have 300+ variations, especialliy in todays market

  • Maurice Edgington 22nd June 2012 at 1:40 pm

    I absolutely agree. I doubt there is any lender whose service is up to a standard that anyone could honestly say is acceptable or comparable to the better service in many other industries. The reason is simple, banks and finance lenders run the world and can do as they please with no one overseeing how actual customers are treated. NatWest, for example promotes ‘Helpful Banking’ has anyone actually found this to be true?