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My Opinion: Harness tech to benefit consumers


Lenders need to embrace the next generation of technology and, where possible, innovate within the mortgage life cycle  

Mortgage lenders come in all shapes and sizes, each facing unique technological challenges. Where larger lenders are consumed with overhauling legacy IT infrastructure, smaller players are searching for the right solution to keep costs low and challengers are focused on gaining market penetration.

However, they all face the same key issue: customers are becoming ever more demanding.

In a world where consumers can achieve same-day personal loans, are used to accessing content via social media and are much more willing to share their data, how can the mortgage market adapt to ensure it meets their needs?

Digital transformation has had a dramatic impact on customer behaviour. Customers expect their interactions with almost every company they connect with to be digital in some way and, most importantly, highly personalised. As a result, they want to be in control of their customer journey.

Broker research

We carried out research focused on brokers’ perceptions of mortgage sourcing and application systems. Among the findings, it was clear brokers wanted to concentrate on adding value for the customer by providing advice, as opposed to form filling. What is more, all else being equal, they preferred to place mortgage business with lenders whose application systems were the easiest to use, most consistent and secure, and which provided the best case-tracking functionality.

However, the research suggests that technological developments in legacy mortgage sourcing and application systems have not kept pace with step-change improvements in customer experience elsewhere.

Lenders need to appreciate how new and emerging technology appeals to millennials – the next demographic of homeowners – and how best to utilise its potential. Forward-thinking lenders that are willing to embrace technological advances will thrive if they can harness technology to strengthen customer experience.

Everyone is talking about new technology and digitisation. For banks, chief among the questions raised are: how can they adapt to the growth in financial technology firms? What are the best strategies to handle their impact on the market? And will these new firms eventually replace them?

Although replacing banks as they are today is unlikely, these new entrants could target profitable parts of the core banking infrastructure – such as international or merchant card payments – which could reduce banks to the role of back-office service providers.

For lenders more broadly, the question is simple: do they embrace the new digital technology culture and create innovation labs to breed the next generation of tech, and then integrate the best solutions into their existing architecture? Or do they wait and see who emerges from the pack and then integrate that technology?

Both solutions have advantages and risks associated with cost and return, but lenders need to embrace the next generation of technology and – where regulation permits – innovate within the mortgage life cycle. To do so, they must move to a more modular approach to technology, breaking down legacy systems into core functionality and moving towards a modern digital layer. This will enable them to quickly deploy new and innovative solutions that will better meet the needs of their customers.Some lenders are already leading the way, but more of them need to be brave in identifying means of using technology.

Data security

That said, a word of caution: not all technological innovation is good. While new, faster and open-source solutions may add functionality, lenders must ensure systems are in place to keep consumer data secure. This is a balance the regulators will watch closely as we move further into the digital age.

Keith Green is strategic product director at Capita Mortgage Software Solutions



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  • Mark Dryden 11th April 2017 at 4:16 pm

    Really agree on innovation within the mortgage life cycle and that pragmatism/inertia will probably lead to a “wait and see” approach for most. The reality is that both new entrants and legacy providers should take a “build to be integrated” approach, it bakes in adaptability from the outset to cater for existing and future / unknown demands. This in part will be seen with the banks and PSD2 where open/permissive integration could lead to innovators simply piggybacking on their infrastructure if the institutions aren’t on their game.