Conor Murphy is CEO at Smartr365
When I first joined the mortgage industry as an adviser, I was shocked by the amount of seemingly unnecessary, repetitive admin tasks that were attached to each individual mortgage application.
What was even more shocking, was that most of the people I met in the industry accepted these processes as just ‘part of the job’.
While we have been seeing some improvement in recent years, the UK-wide lockdown imposed to combat the spread of COVID-19 has changed the game.
The uptake of technology within the famously hesitant mortgage industry feels different from anything I have experienced before; we are being pushed to test new methods and find alternative ways of operating.
Change is in the air
Following the 2008 financial crash, and the ensuing Mortgage Market Review, lending controls were tightened and the industry remained very traditional and analogue – perhaps for good reason.
This new system, with a far greater role for advice, gave brokers the lion’s share of the market, and competition vastly reduced. The market became benign – brokers were successful but the lack of competition from non-intermediary players reduced the need for change.
Fast-forward to 2020, and brokers are facing far more threats to their role in the mortgage process, and most have been forced to adopt tech in order to continue operating during the COVID-19 pandemic.
For example, the vast majority of client interactions have become online-only, with most networks and clubs banning face to face contact at present. This necessitated the use of video conferencing tools, which in turn eliminated long commute times and reduced geographical limitations.
Furthermore, due to remote working and restrictions on physical documents, the short-term relaxation of ID requirements, proved to firms and regulators that remote, digital ID solutions and electronic document transfers are possible, and indeed preferable, as the industry works from home.
There is no doubt that the solutions we are using at present are temporary, as they don’t meet the standards we’d expect in normal times, but they demonstrate to us that long-term solutions are possible, and when the more robust options that are already being developed become more mainstream, we should embrace them with both hands.
Changing in the right way
As lenders and aggregators improve their direct, digital services for things like execution-only business and product transfers, it’s more important than ever that brokers can compete with digital propositions of their own.
However, even with the short-term digital solutions which some brokers have adopted during the pandemic, it is important that businesses also understand the risks and the need for sustainable long-term change.
Ensuring that businesses are using sophisticated systems which are focused on the safety of their clients is essential, but this hasn’t always been the case in recent months. Sharing of documents over email, for example, can pose serious risks of data breaches and cybercrime. It’s vital that in the long-term, proper processes are followed to protect broker and client alike.
Moving towards tech processes as an industry take a series of new regulations and true tech advancements to guide and shape the process for both brokers and their clients.
Focussing on tech
In terms of the tech advancements we have seen, these have primarily come from the true tech companies within the industry. True tech companies are defined by agile work, constant evolution, and a continued investment in digitisation.
These are the key things that must remain central to ongoing mortgage tech development, changing the sector for the better as we push forward for the future.
The industry must be agile in its approach, making forward strides without being limited by prescriptive processes just because that’s how things have been done before.
If COVID-19 has taught us anything, it’s that a non-linear approach is best not only when it comes to growing, but also when dealing with the unexpected.
As the mortgage industry moves further towards using digital solutions for tasks that used to be analogue, we need to take this shift towards tech seriously. We need to invest time and resources into its success.
As part of our commitment to evolution at Smartr365, we have implemented a ‘You Asked, We Built’ promise on the platform.
This allows users to give feedback in real time about the features they like or dislike, and what features they would like built in future.
Every user can see the feedback that their peers have given and Smartr365’s responses, giving complete transparency to everyone. Additionally, users can add further comments, or ‘up-vote’ suggestions, if they support these ideas.
The Smartr365 Product Team reviews this feedback on a daily basis and uses it to inform our development strategy, helping to ensure that we build the things that our users actually want and not simply what we think they might want; this is a standard approach for modern software platforms, but entirely different from how mortgage-tech has worked historically.
I like to think of the broker of the future as a ‘hybrid broker’, marrying the best tech with the best ‘human’ skills of advice and client interaction. We will need to develop and adapt tech to get us there, but the tech solutions we’ve seen over the last few months have shown that we’re on the right track if we can maintain momentum.
Most straightforward administrative or processing tasks can be completed remotely and online. However, for key contact points such as a clients’ annual or bi-annual review, as well as new home purchases, many clients prefer an in-person meeting.
At the moment, these have to take place digitally through remote video calls, which has been proven to be just as effective as a face to face meeting.
The key takeaway here is that by having the right technology and system in place, brokers can flex the specific service offering around the individual client’s preferences and needs.
In person contact can be dialled up or down as best suits the situation, but always with the ‘heavy-lifting’ being automated and delivered by the technology itself.
It is inconceivable to think that mortgage brokers will revert to a world of manual processes and entirely face to face meetings again – and that’s a good thing.