How digital mortgages will give the industry 2020 vision

Derek Garriock

December 5, 2019

Derek Garriock (pictured), head of business solutions, banking and financial services (mortgages) at Experian

2020 is set to be a year of mortgage transformation.

The rate at which already-established digital services are set to be expanded and improved upon signals that the way both customers, looking to buy a home, and brokers and lenders, navigating the mortgage journey, is likely to undergo pivotal and fundamental change.

But what changes do we expect to see? And how will these changes bring about the next stage of digital transformation in the mortgage market?

Pre-qualification and Open Banking

Pre-qualification is already having a significant impact on the customer’s mortgage journey – creating a much smoother process while directing appropriate customers to the most suitable products on offer.

In 2020, we expect to see a further expansion of these digital journeys, supported by increasingly sophisticated pre-qualification technology.

Comparison sites and aggregators are likely to ramp-up their investment in optimising their journeys, while online estate agents, which are beginning to concentrate more of their resources in the mortgage market, will offer new services.

Likely steps could, for example, include online search filters which consider a customers’ affordability, so they can browse properties in areas they are interested in living in.

This initial pre-qualification will then lead the customers in the lending journey, possibly showing lenders that will lend for the property and delivering a more personalised experience.

On top of this, the potential of Open Banking can’t be understated.

By using Open Banking and bureau data services – with the customer’s consent – to prepopulate factfinds and capture their financial information, there can be a significant reduction in the amount of time spent filling in a mortgage application.

Once banks, building societies and other lenders start working with brokers to accept and process this information, we can do away with customers searching for paper bank statements and payslips, streamlining the process even more.

Open Banking will also be used to support improved underwriting processes, helping to gather and validate customer data.

In areas such as buy-to-let, this has major opportunities, where a substantial volume of data is needed to accurately assess a lender’s – whom will typically have a portfolio of properties which will need to be considered – affordability.

The overall impact of all this additional – and crucially, more accurate – data will allow lenders to review their decisioning processes, leading to better services for all, with existing customers looking to switch products likely to feel the benefits first.

The digital age

2020 will be a year where the mortgage industry begins to seriously build upon the digital foundations which are already in place.

As new propositions come to market, this will drive further interest and investment, accelerating even more change.

The challenge is creating and taking advantage of these opportunities to make a truly seamless process between client and broker, leading to trusted, accurate and faster decisions.

But the opportunity is there for all and within reach.

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