How can we reframe an ‘unprecedented’ situation to make practical change in the mortgage market?
Billy Williams (pictured) is head of digital at strategy agency, Distinction.
The digital transformation taking place in the financial services sector – including all aspects of the mortgage market – is gaining momentum. The UK, which is fast becoming the fintech investment capital of Europe, is creating a healthy breeding ground for new and inspiring tech-based, financial solutions.
Launching an innovative new service requires working in an innovative way – how can it offer an antidote to the industry norm when said service is constructed by adhering to it? This is a challenge within the financial services sector which is heavily governed by numerous time-consuming procedures.
It’s also subject to regulatory change on a quarterly, sometimes monthly, basis which can often overhaul pre-existing work and cause delays when launching new products.
It’s a dichotomy and it doesn’t add up.
The ongoing COVID-19 pandemic has put financial services businesses under immense amounts of strain. For the mortgage market, this meant a swift loss of product availability as lenders tightened their belts, only loosening them again following the 95% mortgage scheme announcement this March. Decisions had to be made as fast as the landscape was changing, with many long-term plans temporarily pushed aside as new and urgent priorities emerged that needed to be tackled head-on.
If you’ve operated like this then you may have had an insight into how having an Active Strategy can work. This is the approach we take at Distinction. It’s how we’ve helped a number of these bold, brave financial companies to seize an opportunity before the moment was lost. It’s an unexpected change in the way of working for many, but it could hold the key to a more sustainable future for the sector.
Rather than working to a lengthy plan that favours procedures over action, Active Strategy puts the needs of the customer first and is flexible enough to respond to market changes. If something doesn’t work quite right the first time, the agility of Active Strategy allows you to change direction and fix it, ra-ther than waiting until the next scheduled review when it’s already too late. It requires a particular mindset in order to be effective, but when all parties align it’s possible to achieve the unimaginable.
Act on insight to challenge the status quo
While this strategy’s main advantage is quick decision making, there are still other challenges to overcome but the very nature of the process simply does this for you. Fintech startups are rarely lone opera-tors, with many investors on board as well as the traditional bank processes to consider. While our client may be hell-bent on disrupting its industry from within, there’s the sector’s institutional speed to consider. Instead of dwelling on the problem, having an Active Strategy mindset focuses on what is possible to deliver using the facilities available, always keeping compliance in mind.
A key element of Active Strategy is being willing to try lots of ideas, fail and learn fast from the real world. It’s essential for making iterative improvements, removing the desire for first-time perfection and prioritising achieving goals faster. It also requires you to always keep the customer in mind, so extensive user research is core to the way it operates. For our financial services clients, this stage often identifies that the industry status quo needs to be challenged to produce an effective customer-facing product.
Ultimately, it pushes the boundaries of what is possible.
In one project for a mortgage technology provider, customer insights led to simple design decisions, presenting more approachable language that uses “to live in” and “to rent out” rather than “residential” and “buy-to-let”. Though the user interface was streamlined, helping to drive conversions, the complexity of the system still adhered to all technical requirements needed for our APIs to deliver the information required.
Move faster towards the future
Active Strategy is quite different to traditional processes in finance, but it isn’t a complicated, unachievable way of working. A blend of planned and emergent strategy, Active Strategy gives you a framework to define overarching business goals but be flexible and dynamic enough to respond to market changes.
For financial services, directly affected by fast-changing markets, moving quick is also essential for keeping ahead of competitors. If you’re locked into legacy workflows that focus on the industry rather than the user, then it will be impossible to develop innovative new solutions.
Indeed, we’ve used Active Strategy to work with Podium – a fintech mortgage platform provider – and helped fintech start-up HD Decisions launch their loan search service to market in just three months. HD Decisions was acquired just three years later.
2020 was quite possibly the biggest case study to show all sectors how fragile a rigid, lengthy business plan can be. Whether rebuilding your website, improving customer experience, searching for better ways to reach your market or launching a new service completely, it’s time to harness the agility of Active Strategy to make practical and positive change.