Brokers and lenders: adapt now, or suffer the consequences
Cathy McPherson is group commercial director at On The Money
The UK property sector has been notoriously slow when it comes to embracing change. This is certainly true of the mortgage market.
For many years, mortgage lenders and brokers were able to meet the demands of borrowers by relying on out-dated practices and processes. However, such complacency has now been exposed as a serious issue.
In the last few years, advances in next generation technology have had a profound impact on the way in which consumers are able to engage with businesses. Particularly in the financial services sector, apps and online platforms have revolutionised the way consumers manage their affairs. At the same time, they improve transparency and allow businesses to responsively engage with their clients.
Adapting to new circumstances
The coronavirus pandemic has accelerated this trend. Indeed, in many cases, it has transformed the way companies operate.
When social isolation measures were initially introduced in March, it was surprising to see how many organisations were simply not prepared to adapt to the change in circumstances.
This was particularly apparent for certain mortgage lenders and brokers whose reliance on archaic processes made it difficult for them to transition to remote working, where technology became essential.
Positively, however, having turned to technology to overcome the immediate challenges posed by the lockdown, brokers are now witnessing just how accessible and easy to use these solutions are.
Now, the government has begun to slowly loosen lockdown measures; the property market is among the beneficiaries of this decision. But it is wrong to assume that things will return to back to how they were at the beginning of the year. In fact, things may never return to what we considered “normal” before the lockdown.
I believe COVID-19 is sparking a technological transformation of those involved in the property market. This makes sense given there are now platforms geared to meet the needs of brokers and intermediaries, ensuring they can provide a fast and efficient service.
Over the coming months, rapid adoption of next generation tech is likely to change the way brokers engage with lenders and clients; here’s how.
One of the biggest challenges mortgage brokers face is managing and progressing separate conversations in order to complete an enquiry. This can be a complicated process.
At the moment, the majority of brokers rely on emails and phone calls when dealing with lenders and their clients (or prospective clients). While there is nothing inherently wrong with this approach,
it can be difficult to stay on top of multiple conversations while also ensuring regular updates are being provided to the client.
Online platforms change all this by providing one single location at which brokers can manage all their conversations. Brokers can send emails, record calls and keep records saved for each case all via one platform.
At the same time, these platforms provide brokers with direct access to third parties they need to liaise with as part of the enquiry process, including the likes of HMRC and the Office for National Statistics. In short, these tech-enabled platforms dramatically improve transparency and communication.
Using AI to create risk profiles
Artificial intelligence (AI) is playing a far greater role in many industries, but few people understand exactly what benefits it provides. It is worth exploring this within the mortgage sector.
AI is naturally positioned to process reams of data in seconds. It can pull numbers, identify outliers, map common trends and produce analytical reports, helping to inform bigger decisions.
For brokers, AI can be leveraged to create detailed risk profiles of their clients in seconds by reviewing the relevant documents and quickly determining which products would be best suited to each individual client.
Excitingly, AI’s ability to produce risk reports is not just confined to quantitative data analysis. In addition, advances in machine learning (ML) mean that AI can help create a digital footprint of individual clients based on their online activities. While this is still being developed, it will ensure brokers have access to a comprehensive profile of each client they engage with.
Tailored services and products
Finally, perhaps most obviously, next generation platforms designed specifically for brokers ensure they have ready access to hundreds, if not thousands, of mortgage products and services.
This means that rather than manually reaching out to each individual lender, brokers can use the platform to quickly scan through the different products available.
What’s more, having established the needs of a particular enquiry, brokers can quickly filter out irrelevant products and find those most tailored to the needs of their clients. This may not seem revolutionary.
However, the reality is that many brokers still rely on manual outreach to individual lenders. This is a time-consuming process and means that they are at risk of not investigating the full suite of products relevant to their clients.
The above examples demonstrate how tech – from AI to online communications platforms – is practically changing the way brokers and intermediaries operate. The immediate obstacles posed by COVID-19 has demonstrated the practical benefits of such technology, and over the coming months, we are likely to see more brokers taking advantage of these next generation platforms.
There’s little reason not to – they improve communication, automate tedious and repetitive processes, and give brokers the tools to act quicker. Moreover, brokers who remain complacent are at risk of being outpaced by competitors who readily embrace technology and take full advantage of the benefits it has to offer. Now is the time to adapt and transform outdated, archaic processes.