We live in a technology enabled generation where customers take for granted that access to almost anything is available on your mobile phone.
UK mortgage lenders operate in a process driven market place. With 11 million UK residents having credit secured on their property it is a high demand, high value area.
The customer isn’t focussed on what the mortgage specifics are. They are thinking about the property, the location and the features. The lifestyle it will bring them as home owners.
The mortgage process is complicated. Less than half of people have paper based accounts. So how can we possibly expect customers to provide paper proofs if they don’t have them? Are we expecting them to request them and then submit – adding yet another week to the application time?
The digital appetite for accessing mortgages online is growing
Three out of four young adults have digital bank accounts. Two thirds of customers are loyal to their mortgage provider. But nearly half (46%), access their mortgage account less than once a year, according to research. Therefore, engagement in the product is low. People are driven by the best financial deal. With a mortgage consuming a high proportion of their income, cost is certainly going to be a factor when purchasing.
Interestingly more than half do access their mortgage account online – showing the signs of a digital appetite.
The right technology has the potential to offer enormous potential to mortgage lenders. Streamlining processes, improving efficiencies and reducing the cost to serve too. Used appropriately it can complement the customer demands too. It can also be compliant. It can be digitally inclusive. You don’t need paper any more, you can upload electronic identities. You can use Open Data sources to validate affordability through categorisation and more. You can predetermine the right product for the right person using prequalification. You can deliver personalised choice.
But what about the technology to support the appetite…
Technology can be complex, you need to consider how you use technology. You need to consider what your customer wants and how technology can help you achieve this. And, you need to consider how you achieve this for everyone. With 11 million customers – there are a lot of different demands.
Essentially the reason for the increase in mortgage application time is an output of the MMR (Mortgage Market Review). Mortgage lenders have interpreted the guidelines and formed a response with more robust, detailed and specific applications. But, regulation doesn’t need to stifle innovation. In fact, the regulator is encouraging it.
Technology can be enhanced and new tech-enabled models can be applied. Transformation projects can update legacy systems and replace them with new agile platforms that are modern and adaptable. But how do you make the shift? How do you completely transform your back-end and move towards a more innovative and flexible platform that considers all the background information you have stored?
- You could update your technology. Read more here
- You could do a complete transformation. Read more here
- You could partner with a Fintech. Read more here
The mortgage market is changing
Customers are changing and regulations are changing. Now is a great opportunity to change too. To enhance and to capture the market. But, how you do this will depend on your appetite. What’s important is that disruption is reduced and the customer is at the heart of any change.