Tolfree: Tech giants are biggest threat to market

Michael Lloyd

October 18, 2019

The biggest challenge to the mortgage industry are huge tech firms like Amazon, Apple and Google, Buster Tolfree, commercial director of United Trust Bank, has claimed.

He said that with costs of funds it’s impossible to compete with the mainstream lenders, so lenders need something else to set them apart, for example, UTB’s ID facial recognition verification service it launched last month.

Tolfree (pictured) said: “In 10 to 15 years’ time though, it’s not the big boys that worry us. It’s Amazon, Google and Apple. Those guys know everything. You could be doing a Google search for trainers and the next advert that comes up is for the trainers you were just searching for.

“Think of that logic but in your handset and where you go and travel to and spend money. Think of the financial awareness they have.

“Fast forward 10, 15 years’ and these firms that aren’t massively in financial services, will be the biggest threat.”

Mark Lusted, managing director of Dock9, agreed singling out Amazon will pose the greatest threat.

He added: “I think it’s definitely a threat and Amazon would be the bigger threat because of its holistic view of the customer.

“These firms have been talked about over the last few years as a big threat.

“So far Apple have only dipped their toes into financial services with Apple Pay, but in five years’ time I can imagine this being a much bigger threat.”

Stuart Philips, director of BrokerSense, added: “It is only a matter of time before the tech giants make bigger inroads into the mortgage industry and when they do, they are likely to be in the same vein as the robo-advisers.

“What they will never be able to replace however is the need for face-to-face advice – both from a human point of view and the need to actually sit down with someone who has more complex mortgage needs.

“In order to remain relevant and stay in business however, mortgage brokers need to embrace the technology available to them to make the advice process as slick, quick and easy as possible so that meeting face to face with a broker remains a desired option.

“Tools such as mortgage calculators, criteria and product search tools and good CRM systems all help make the process as streamlined as possible both for the client and for brokers themselves.”

David Bennett, commercial director at eKeeper, said that Google, Apple, Microsoft, and Amazon have recognised not only the value of data but the value of the insights it provides.

He said: “As payment providers (Apple Wallet, Google Pay, etc.) already have so much data about our spending habits they may well use it to offer loans or mortgages, but are we talking about the serendipitous or the scary?

“An example being purchasing a pregnancy test and bombarded with adverts for larger homes or protection products.

“Data is fundamentally valuable and for those in the financial services world, defending data and using that data effectively themselves is the best defence to keep this market unattractive.”

However, Dale Jannels, managing director of Impact Specialist Finance, and chief executive of One Mortgage System (OMS), said that execution-only is more of a risk.

He added: “Execution-only is pretty scary because now all the ambulance chasers have gone from PPI, where are they going to go next?

“We see lots of brokers not even doing suitability letters. We are trying to encourage people them to do so and back up their advice and recommendation.

“You could do mortgages on apps in seconds, but it doesn’t mean that’s the right thing to do.”


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