There are some things in life we can no longer live without. Even though when we bought them they seemed like a novelty. When we first purchased a smart phone we didn’t buy it primarily so we could access the internet, neither did we buy our film streaming package so we could watch a TV mini-series. But when we consider losing these products, they no longer seem a novelty, they’re key to our lives.
What’s caused our change of perception? It’s not necessarily the programmes or films offered to us, or the user experience of the apps that make us cling onto these services. Our once novel purchases simply make our lives so much easier and more convenient. Where once we would have to wait to access a computer to find the answer to that burning question and traipse to the shops to get our Friday night film, we can now simply pick up our phones and remotes and have what we want in seconds.
Banking has become convenient, except when it comes to getting a mortgage
It’s not just our day to day tasks that have been overhauled; even complicated things like banking have become more convenient. To apply for credit, we no longer have to arrange an appointment at a branch. We can go online, wherever we are and anytime, complete an application and in no time at all we’re using a loan to pay for an extension, a credit card to buy ourselves a well-deserved holiday or a current account to pay for our gym memberships.
Yet when it comes to a mortgage application, we seem to enter a world that carries the same painful processes we went through 10 years ago.
At a time that’s already stressful, emotional and has such a large impact on us financially, we’re asked to start making appointments of up to two hours and gather together reams of paperwork to prove who we are, and if we can afford to repay the loan. We all know the reasons for this ‘belt and brace’s’ approach and agree that thorough affordability checks and best practice fraud avoidance are necessary to avoid a repeat of the last financial crisis that saw one million households go into negative equity. But when most of us are encouraged to bank online and the technology industry is booming, why can’t our documents be transferred electronically? After all, it would be so much quicker, would allow for more accurate decisions to be made and help those people who are financially solvent but don’t have a credit record – a win-win for all the parties involved.
It’s time to change
In electronically sharing current account transactional information in the mortgage process, some very clever and exciting things can be achieved. Analysing the transactional information on someone’s current account can help you get an accurate and consistent assessment of an individual’s affordability – a key regulatory requirement. Suddenly those two hour interviews get sliced in half, resulting in less risk for you and reduced costs and a more satisfying customer experience. If transactional information is then fed into real-time decision tools, the decision-making process quickens and the number of consumers who have to go through an underwriting process starts to tumble, allowing you to grow your business. Adopt this process to your broker channel and any issues with having too little or too much information start to disappear, meaning you can mitigate the risk of your applicant missing out on their dream home.
We know that getting to the point of sharing transactional information is by no means a small task and it’s not just a matter of quickly knocking together an API. You’ve got governance to think about, security standards to meet, defining authentication standards and with PSD2 being enforced in 2018, alignment to regulation. And all of this before you have thought about how you’re going to use the data you’ll get access to for yourself. However, the benefits of getting it right and embracing the change significantly outweigh the short term costs and upheaval.
Mortgages don’t need to be cumbersome. In sharing transactional information and other document proofs, the application process can become as convenient as it is for credit cards, current accounts and loans. Get in touch with your account manager or contact us via email to see how we can help you along the way.