It isn’t where you came from but where you’re going that counts, as Ella Fitzgerald said.
Only a few years ago, paper-based processes still dominated in many advisers’ offices. Applications progressed by stacks of paper moving between desks — slowly. It was a laborious process for clients and brokers. Even where technology was employed for specific tasks, there was little integration with other parts or players.
The first thing we need is greater standardisation
The pandemic has changed all that. The move online and consumer demand massively accelerated the trend towards digitisation in the industry.
Open Banking is just one example of the change our industry has witnessed. At the start of 2020, the number of customers using Open Banking in the UK passed one million. By the end of the year that had more than doubled, and today it’s seven million. It has helped automate affordability checks, eliminate requirements to re-key data and speed up cases for customers.
Elsewhere, client portals are providing greater visibility and simplifying applications; digital submission to lenders is eliminating waiting times caused by posting documents; decision-in-principle systems give instant lender responses; automatic valuation models offer an easy way for applicants to see what their property is worth; and digital referrals are helping simplify the search for home insurance and solicitors.
Tech frees advisers to focus on where they deliver genuine value
Finally, of course, there’s been a proliferation of mobile apps and tools for brokers and homebuyers.
Such tech is not ubiquitous, though. Adoption levels vary, and so does the success with which it’s applied. Nevertheless, where tech has been integrated it has largely resulted in a much more efficient, streamlined and convenient process.
Positive attitude
Attitudes to tech have been transformed in the process. Lenders are embracing intermediaries’ connecting customer relationship management (CRM) systems and other platforms to share information digitally (even if, again, some are further along this digitisation journey than others). The industry is also accepting cloud-based tech and software-as-a-service, accelerating the uptake of more sophisticated tools and technology.
We’ve seen the success of property portals Rightmove and Zoopla. Imagine if customers could access professional advice in the same way
However, there are still significant issues to resolve. While lenders are increasingly willing to connect to CRMs, advisers face different tech journeys for different lenders. For greater efficiency there should be more consistency.
The mini-Budget fallout, meanwhile, showed there was still work to be done to improve the way the industry managed capacity and product changes.
But this doesn’t undermine the transformation we’ve seen. There will always be room for improvement, and the digital journey in lending and advice is far from over. The key question is where it’s going next.
Bright future
In looking ahead, the first thing we should hope for is greater standardisation. We must move to a standard client information package that is accepted by all parties in the chain, from brokers and lenders to solicitors — saving all, including customers, significant time and effort. Not only would this information be reusable throughout the journey but it would provide a further boost to the efficiency gains we’ve seen in the process.
Advisers face different tech journeys for different lenders. For greater efficiency there should be more consistency
Moving to such a standard must not be an ambition for the long term, either; we can achieve it within five years. The building blocks are in place and all parties are already sharing the required data, to a greater or lesser extent. We just need a consensus on a standard format.
The second development we need is for the mortgage journey to become more customer and digital led. Too often in lending we look to tech to make traditional processes easier for the industry. Instead, we must reimagine lending to create a digital experience that reflects borrowers’ desires and needs.
We’ve seen the success of property portals Rightmove and Zoopla. Users can quickly search for properties to meet their precise requirements, whether at home or when commuting to work. Imagine if customers could access professional advice in the same way.
Where tech has been integrated it has largely resulted in a much more efficient, streamlined and convenient process
Changing these processes will make things better for applicants while enabling advisers to concentrate on other things. That will become increasingly important with the Consumer Duty, which brings a renewed, more intense focus on ensuring customers get the right outcomes.
This is about how the advice is provided, and the tools and information clients can access. For vulnerable clients, it means tailoring the advice process to their specific needs, which will take more of advisers’ time.
Tech frees advisers to focus on where they deliver genuine value: in really understanding the customer, their circumstances, desires and needs — and building a relationship that tech cannot replace.
Thora Kehoe is chief product officer at Smartr365
This article featured in the March 2023 edition of MS.
If you would like to subscribe to the monthly print or digital magazine, please click here.
