The future of online trading

Bill Safran, CEO at Trigold

They used to call New York ‘the city that never sleeps’ because this was a place where you could get anything you wanted at any time of the day. Nowadays, with the internet, we must branch this out to ‘the world that never sleeps’. Wherever you are in the world, whatever time of day, if you have a computer and access to the web you can do any number of things, for example, who needs to wait for the bank’s branch to open at 8.30 am; simply log-on and have access to your finances whenever you wish.

Mortgage intermediaries are no different which puts a different kind of pressure on the companies brokers rely upon to carry out their business. This is where technology has come into its own and allowed the further development of our 24/7 market. Where once all mortgage applications were paper-based, now many lenders only accept business via their online systems, which means we have mortgage offers received in minutes rather than days. This allows an adviser to deliver a degree of certainty to their client. It also means clients can leave an adviser’s office secure in the knowledge of the product they can have, what rate it is and which lender is prepared to lend to them.

Lenders have quickly realised that, by delivering further technological developments to intermediaries, they can win their ‘hearts and minds’ and also, more importantly, their business. An advisers’ desktop is now a battlefield where provision of the ‘next big technological thing’, i.e. easy-to-use systems with a unique offering, can be the difference between winning and losing.

For instance, online decisions-in-principle have been with us for a while but last year saw the launch of the next stage, the instant point-of-sale mortgage offer. This service was launched by GMAC but other lenders, notably edeus, have been quick to follow suit. In the mortgage market, technological innovators very rarely stay ahead of the pack for too long, especially considering the value of today’s mortgage market and the profits to be made. Lenders are now all about increasing speed and flexibility, to make it easier for brokers to do their jobs whilst continuing to provide a level of customer service that makes them a cut above the rest.

Quick decisions and constant updates are at the heart of today’s technological breakthroughs. Much like the Cold War ‘Space Race’ saw the superpowers attempting to beat one another to be first to land a man on the moon, in the mortgage market we now await the first lender that will be able to provide a point-of-sale completion. Today’s systems are constantly evolving and the aim is to provide seamless, end-to-end integration.

With the automation of lenders’ systems, sourcing systems continue to provide a crucial element of each intermediary’s work with their clients. Sourcing systems will continue to be at the centre of an advisers’ work as long as we can continue to deliver value and support. We will continue to work with lenders in their efforts to evolve and advance – indeed as they update their systems, so must we. For example, there is now no need to complete multiple applications on both a sourcing system and the lender site; the sourcing system will now populate the client’s data on the lender’s application form for each individual lender.

These sort of developments are set to continue. Where an adviser’s time can be saved, so can money. The less time you spend on the processing, the more time you will have to spend with other clients. This will make your business a more profitable business. In the great scheme of things, mortgage brokers are in an enviable position. It is they, after all, who will benefit most from the mortgage technology ‘Space Race’.

Alan Cleary, Managing Director at edeus

We have seen some of the greatest advancements in technology in our industry during the past few years, giving brokers quicker communication opportunities and the possibility to do mortgage business online. We have seen some lenders putting technology at the heart of their propositions and introducing system features that enable decisions, offers and completions quicker. Today’s true on-line mortgage application systems allow an integrated end to end process from decision to completion and instead of filling out paper applications, intermediaries can create a fully credit checked decision and printable KFI in minutes to give the client all the certainty they need. In addition instant offers via automated valuation models (AVMs) allow them to benefit centrally held data effectively removing the need for a valuation report. In the case of a remortgage, funds can be released within only a few days today. edeus’ record for a completion is 24 hours from application; this was a first in the UK mortgage market. Case progress and decisions can be monitored via features like email and SMS text notifications, and electronic scorecards as well as automatic downwards (and upward) cascading lending systems help lenders to assess risk and the broker to find the most appropriate mortgage for the client. Today’s technology also enables lenders to accurately detect potential abuses, which whilst not a major issue in the industry but it still happens. For example, in the seconds it takes edeus’ system to make a decision it will have contacted two fraud prevention agencies to review its files and pull back any relevant information. In addition the system will evaluate whether the income looks suitable for the particular type of employment and give a clear picture as to whether the size of the loan is in line with the customer’s historical information.
Technology has removed a large part of the human element from underwriting, allowing consistency in decisions. However, individual applications are not consistent, especially in sub-prime lending, so the key is achieving a balance between automation and humans. Finding the best mix between the two will be challenging for the next online-trading generations to come and they certainly will come. Just look at the car industry, cars are constantly developing to become more efficient and faster. In my opinion today’s lenders are still building Skodas from 10 years ago, so there’s a lot more to come. The functionality and purpose will still stay the same; just like cars still bring you from A to B, lenders will still be delivering mortgages. But the way in which we will do it will evolve and become even quicker and more efficient. Where is technology going? Well, when the first train was built in the 19th century people thought speed levels of 10 mph will peril their health. They probably would have suffered from a heart attack when witnessing today’s aviation, traveling some 50 times that pace. But one thing that remains clear is that automation means efficiency for lenders, and they should start looking at where to invest further. Lenders should try to finish off their online proposition by employing and educating skilled people. No matter how automated the proposition will be, brokers will still want to speak skilled to people, not machines.

Simon Baker, operations manager at Leadbay

Fed up of working from a dingy office in a central city location? Prefer to work in the country or from somewhere sunny? Online trading could be the answer you have been looking for.

The internet has revolutionised the way that people do business. Increasingly mainstream, there are fewer and fewer people who don’t use a computer as a fundamental part of their daily life.

At the end of 2005, 62% of the UK had an internet connection at home and 18 million people used the internet to shop online. With an increasing number of consumers using the internet to research and buy what they want at a time that suits them, this is causing a shift in the way we do business, creating opportunities for advisers that just wouldn’t have existed a few years ago.

Online trading started with the buying and selling of physical goods, but increasingly encompasses the auctioning and trading of services. The mortgage industry has not been slow to take advantage of the opportunities presented by the internet. From online mortgage lead generation to mortgage offers; e-conveyancing to advertising, the whole industry is adapting to consumer requirements for instant, online access.

As the online market grows at the expense of traditional markets the way we do business is set to be transformed. While there will always be a demand for face to face communication, especially in advice, initial contact will increasingly be through the internet. We have seen this markedly in the lead generation industry as the number of people searching for a mortgage adviser via the internet has grown dramatically.

As consumers become more savvy their demands will increase and all companies transacting business online will have to become more sophisticated to meet consumer demand. Technology will move on considerably and those companies unable to keep up with online developments will be in danger of losing market share.

However, many technological advances will work in favour of advisers. As borrowers utilise the convenience of their home computers, more business will be done at unconventional times, which means a declining need to work a conventional 9-5 day. This will mean that advisers can increasingly work at times to suit their lifestyle rather than at times dictated by outside forces.

While an instant response will be expected as the norm, mobile technology will mean that you are increasingly free from being tied to a desk as you will be able to respond from wherever you happen to be.

Taking this one stage further, as clients are happy to have more interaction with you electronically, you will have less need to be tied to one location, not only in terms of an office but even a region or a country. This will present you with more business opportunities as you will be able to work over a much wider geographical area. Leadbay has already seen a number of people utilise its lead generation system to work from Spain. These are advisers who are registered in the UK, but who live in Spain for much of the year. They communicate with their clients by phone and travel back regularly to see all the clients who would like a meeting with them.

Online trading will mean increased flexibility; it will also mean increased globalisation as the effect of national borders will be reduced and advisers will not necessarily even need to be in the same country as their client although the effect of regulation may slow this. Regarding new technology, mortgage advisers will have two options: either develop your own, or use someone else’s however it will be essential to take advantage of electronic communication to grow your business and work in the way that you want to.

Fed up of working from a dingy office in a central city location? Prefer to work in the country or from somewhere sunny? Online trading could be the answer you have been looking for.

The internet has revolutionised the way that people do business. Increasingly mainstream, there are fewer and fewer people who don’t use a computer as a fundamental part of their daily life.

At the end of 2005, 62% of the UK had an internet connection at home and 18 million people used the internet to shop online. With an increasing number of consumers using the internet to research and buy what they want at a time that suits them, this is causing a shift in the way we do business, creating opportunities for advisers that just wouldn’t have existed a few years ago.

Online trading started with the buying and selling of physical goods, but increasingly encompasses the auctioning and trading of services. The mortgage industry has not been slow to take advantage of the opportunities presented by the internet. From online mortgage lead generation to mortgage offers; e-conveyancing to advertising, the whole industry is adapting to consumer requirements for instant, online access.

As the online market grows at the expense of traditional markets the way we do business is set to be transformed. While there will always be a demand for face to face communication, especially in advice, initial contact will increasingly be through the internet. We have seen this markedly in the lead generation industry as the number of people searching for a mortgage adviser via the internet has grown dramatically.

As consumers become more savvy their demands will increase and all companies transacting business online will have to become more sophisticated to meet consumer demand. Technology will move on considerably and those companies unable to keep up with online developments will be in danger of losing market share.

However, many technological advances will work in favour of advisers. As borrowers utilise the convenience of their home computers, more business will be done at unconventional times, which means a declining need to work a conventional 9-5 day. This will mean that advisers can increasingly work at times to suit their lifestyle rather than at times dictated by outside forces.

While an instant response will be expected as the norm, mobile technology will mean that you are increasingly free from being tied to a desk as you will be able to respond from wherever you happen to be.

Taking this one stage further, as clients are happy to have more interaction with you electronically, you will have less need to be tied to one location, not only in terms of an office but even a region or a country. This will present you with more business opportunities as you will be able to work over a much wider geographical area. Leadbay has already seen a number of people utilise its lead generation system to work from Spain. These are advisers who are registered in the UK, but who live in Spain for much of the year. They communicate with their clients by phone and travel back regularly to see all the clients who would like a meeting with them.

Online trading will mean increased flexibility; it will also mean increased globalisation as the effect of national borders will be reduced and advisers will not necessarily even need to be in the same country as their client although the effect of regulation may slow this. Regarding new technology, mortgage advisers will have two options: either develop your own, or use someone else’s however it will be essential to take advantage of electronic communication to grow your business and work in the way that you want to.