Joshua Sargent is general manager at Candid
The competition in financial services, particularly online, has continued to increase at a staggering rate. London & Country, the UK’s largest independent mortgage broker recently revealed it has successfully processed £7.7bn of mortgage applications through its online mortgage finder, since its launch 18 months ago.
The firm is also currently working with the FCA in its Innovation Sandbox to develop a platform that allows a customer to interact, select and transact their mortgage, end-to-end online.
Consumer demand for digital mortgages is building. A recent survey carried out by AltFi in partnership with Streetbees of 1,000 consumers, found that 27% of UK adults would consider taking out a mortgage with a digital bank.
These digital mortgage providers are competing for the attention of the same customers as traditional brokers. This will put many brokers under pressure, as they are going to have to spend more to acquire a customer and will be required to compete against a different type of service provision.
It is vital that brokers have a strong digital presence as this will help them generate and retain business. Most of the brokers and lenders who are performing well right now have built their reputation online, supporting it with clear messaging to illustrate what they can offer consumers. They are providing refreshing and engaging content across digital platforms and are highly proactive in generating positive online reviews. Importantly, they also educating consumers on the importance of quality, professional and bespoke personal advice.
Increasingly, consumers are using the internet to build a profile of brokers and lenders before even making an enquiry, especially with the ease of access to online reviews and ratings. They expect an ‘on-demand’ service, rather than a service that suits the convenience of the service provider, so brokers need to offer a variety of communication options and provide advice, around the clock.
Our research shows that response times can make a huge difference to conversion rates. Typically, if a call is made to a consumer within one to two minutes of their enquiry, 80% will respond to a call positively. Any longer than two minutes and the response rates plummet by 40%-50%.
It is also important for brokers to focus on the future benefits of seeking mortgage advice instead of switching rates for short-term benefit. There is a large proportion of the market which could potentially afford to pay off more of their mortgage to own their property outright earlier in life.
More often than not, much of the messaging which goes into attracting people to make an enquiry to discuss their mortgage relates to saving money or cutting rates. Through innovative and dynamic marketing techniques, we see a huge opportunity in engaging with this type of person to benefit the customer, broker and lender.
Fundamentally, the role of the mortgage broker is to find and advise the client on the most suitable mortgage product. In the majority of cases, ‘robo-advice’ and online providers are not going to be able to fully replace this type of service. Mortgages are far too complex to be replaced by something that cannot adjust to different scenarios relating to somebody’s personal finances.