Learning from the digital broker

David Bennett

June 14, 2019

David Bennett eKeeper

David Bennett (pictured) is commercial director at eKeeper

Over the last few years the mortgage market has outperformed many expectations. A favourable backdrop of continued government support aligned with rising wage growth and slowing of expansion in the private rental sector has provided fertile ground for the sector. Recent market conditions have not, however, been quite so positive with lenders such as Tesco Bank, Secure Trust Bank and Amicus Finance exiting the sector for good while others such as Fleet Mortgages and Metro Bank have experienced other challenges.

This environment has seen an increasing focus on the development and usage of technology, with a whole host of innovative options being designed to improve processes and service levels within the industry. One such area of focus has been the digitalisation of mortgage advice, which has seen numerous digital mortgage brokers launching into the mortgage arena.

Brokers are in a position of strength in terms of the market share they hold with recent reports estimating that between 75%-80% of residential transactions are intermediary-led. These impressive figures will still include a high percentage of broker written applications that may have been produced via time-consuming telephone meetings or home-based appointments. This information gathering area of the advice process is one in which the technology-led digital brokers excel and one which the market needs to welcome if it is to maintain and grow these impressive percentages.

Desire to self-serve

Driven by the consumer’s apparent increasing desire to digitally self-serve, these entrants use sophisticated technology designed to make the process of getting a mortgage quicker and more convenient; with clients able to complete an application from any location at any time of day or night. The key advantage of this digital onboarding process is the speed and ease in which it collects and collates the most pertinent information required to kick-start and qualify a new customer relationship.

This use of technology also allows access to mortgage options more quickly than a manual method. The online format provides the option to provide vital documents in scanned form as opposed to the traditional paper version, so fact finds and eligibility checks demands are eased. This automated process benefits both client and broker as the potential to forget data sections or requests is eradicated. This digital onboarding is crucial to the growing popularity of this advisory route as the onboarding experience can define the ongoing relationship the customer has with the organisation. The well-designed customer journey ensures that new clients are quickly comfortable with the broker and satisfied with the vitally important first contact.

Onboarding in the digital age

It very quickly becomes clear that this approach can lead to improving the key variables that aid client retention. As well as offering a better initial experience for a customer it in turn can build loyalty, locking in profitability and future referrals while complying with the highest regulatory demands. By producing a more streamlined approach via a single touch point, digital onboarding is tailored to the client from beginning to end. While it may be an old saying, the facts remain that, “you never get a second chance to make a good impression”.

By improving the speed and accuracy of the initial client onboarding the use of increasingly automated services will allow the vitally important human interaction that brokers will still be required to offer. This approach can improve client interactivity when it is most needed. Changing employment types leading to complex incomes and growing numbers of the self-employed, alongside an ageing population means that expert broker advice will never go out of fashion.

Digital onboarding will become the first cog in a process that will work best when it is aligned with a suite of fully integrated digital applications for customers, lenders and brokers. An ongoing application process which combines the human interaction with a broker alongside customer relationship management tools, automated product recommendation, form filling capabilities and eligibility and affordability calculators, will likely become the industry-wide system of choice. Designed to flow through the broker point of sale and advice systems through to lender platforms, this connectivity is set to be enhanced further as digitisation optimises the application process. By following this process those operating in the mortgage market will make quicker and more informed lending decisions thus retaining the vital element of customer trust.

All-encompassing mortgage advice process

Utilising all these tools, brokers and lenders can meet the Financial Conduct Authority’s Mortgages Market Study mandate which encourages innovation to make it easier for customers to find the right mortgage. The recent FCA consultation document outlining proposals for changes to its mortgage sales requirements have seen added focus given to the value that multi-channel technology can add for customers. The debate about the advantages and/or disadvantages of a more digitised mortgage process versus the more traditional model continues. Moving forward, instead of choosing one approach over another, however, it may be better to identify the positive aspects of both as a guide to a more all-encompassing approach to the mortgage advice process.

In its recent research paper, ‘Digital Change and Mortgage Borrowers’, the CML found that when looking to the future, customers want a variety of things from their mortgage process. One clear need being a choice of interaction methods, including interaction via a blend of physical and digital channels. Allowing easy integration with third-party systems, technology can ensure a seamless balance across both. All the companies interviewed agreed that digital mortgage changes will have a positive impact on lender-to-intermediary interaction, and that they will be continuing to invest in digital changes over the next three years to offer a frictionless end-to-end mortgage journey

Regardless of the platform or groups involved, all models have the same intention – to save customers time, hassle and money by quickly pointing them in the direction of the most suitable mortgage product.

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