Phil Bailey is strategy director at Twenty7Tec Group
“Where do we draw the line between all this fancy technology and the value of my mortgage adviser?”
A few weeks ago, I was asked that exact question by someone who knows very little about technology or the world of mortgages – My 92-year-old neighbour.
I was attempting to explain what I do for a living and the industry I work in. I don’t believe it went very well… as I’m almost certain Rosemary now believes I’m single handily responsible for the financial crash. While helping to destroy the world of lending with my army of cyber robots and systems that will take people’s jobs and destroy the known world as we know it.
One might say… our chat could have gone better.
But it’s a very valid question that has been raised in some way or another, more times than I care to remember. I’ll admit, usually through the more likely person – a mortgage broker, over old Mrs Whitaker next door.
Broker facing technology is there to aid not replace. It’s all about getting you majority of the way there, while still ensuring you do what you do best and advise your client.
Don’t get me wrong, I’m a huge believer in AI, robo-advice, algorithms and generally anything else that can give a customer what they expect in this day and age. But for now, I’ll focus on broker-facing technology and the systems that allow you to be even more than just a mere human.
Sourcing systems are a great example of this, allowing you to expand your knowledge across thousands of products and see a snapshot of what the market is offering at any given time. Some do this better than others, but should get you 80% of the way there in choosing the right product for your client. Not try and dictate who to go with.
For example, only you will know what lender BDM came for a visit last week and told you about a new product, or that special underwriter who has helped you in the past with a tricky case. A sourcing system is never going to know these things, and in all honesty… doesn’t want to.
Sourcing systems are there to narrow the products available, not try and replace or counter the knowledge you have built up in this industry as mortgage brokers.
This is where using lending criteria or client eligibility via sourcing needs to be taken with a pinch of salt. Yes, criteria based sourcing is a huge step in the right direction for more accurate results, without trying to replace the value of a broker. Adding real value and accuracy to narrow your search, without leading you towards one lender over another.
Client eligibility checking is a completely different game though. Checking a client’s affordability, bank statements, outgoings, credit report or the lenders appetite to lend is not always a time saver. Is the system checking every lender? Does the system work effectively when there is manual underwriting involved? How much data is it checking to provide an answer?
I have heard brokers in the past tell me that many lenders struggle to know their own lending appetite at that specific date and time, let alone allowing a system to tell you.
How many times has a sourcing system told you a product isn’t available, only for you to then call the lender or BDM and get the product you knew existed? How many times have you found the best product for your client, only to struggle getting your technology or compliance steps to match what you know is best for your client?
Sourcing systems and mortgage technology in general is far from perfect. But it doesn’t need to be. Let sourcing systems get you 80% of the way there so you can do what you do best.
Until more lenders make available their detailed lending criteria, client eligibility details and all the things they hold in that magic black box of theirs. I suggest we leave that side of things firmly with the brokers and their knowledge of the market and products for now. Yes, you might save some time with the odd DIP/AIP. But I would hate to be the one trying to justify my recommendation based on “the system said so”.
The world of Fintech is changing faster than ever before. But let’s not get ahead of ourselves until we fix the basics first.