Written by Grant Hendry, Head of Community, MortgageGym
Technology has the potential to change the face of mortgage distribution dramatically, yet many brokers still appear to be anxious about stepping into the digital realm. In fact, a recent survey showed that as many as 40% of brokers did not even have a website; one could argue, a minimum requirement for any business in the 21st century.
Embracing technology will, quite simply, save brokers time. Instead of being absorbed in paperwork and administration, brokers will be able to dedicate more time to providing their clients better service. Last year, IMLA published a report that explored how the mortgage market is working for consumers; the research found that 67% of consumers identified “too much paperwork” as their chief frustration with the mortgage application process.
As a broker, then, why not embrace technology that alleviates such friction points in the customer’s journey?
In the area of insurance, we’re already seeing tools that are revolutionising the underwriting process. For instance, Legal & General launched a service that provides customers with a life insurance quote based on a ‘selfie’. Such advances might seem improbable, but they indicate some of the ways that everyday technology – such as a camera phone – can be harnessed to smooth the customer journey in financial services.
Likewise, MortgageGym and MortgageGym Pro use the latest image-recognition software to automatically populate application forms and authenticate legal documents. This makes the customer’s life easier; after all, who wants to go to a High-Street bank to show someone their passport? Also, it reduces the administrative burden on brokers faced with the tiresome task of completing applications by hand through numerous lender portals.
This brings us to another controversial but, in my opinion, game-changing piece of technology: robo-advice. The term has become taboo within the broker community, but I think this is because it is largely misunderstood. The portions of an application that we automate with MortgageGym are aimed at:
1) Giving customers piece of mind through live-decisioning;
2) And reducing the overhead costs associated with compliance processes that have hampered DA-brokerage business models.
The ‘robo’ advice that we implement in MortgageGym is designed to make brokers’ lives easier, freeing them up to focus on the overall financial health of customers.
A number of straightforward mortgage applications can be largely automated, as long as a broker is on hand to address any other outstanding issues the customer might have.
However it is vital to note that – whether the application is straightforward or complex – human judgement is an important part of the process. Brokers will still be required to provide the highest level of advice that a customer could not currently achieve through robo-advice alone.
Ultimately, lenders need more automation in their mortgage proposition. For example, whether a lender is willing to offer £5m or £50,000, they will still require an assessment of the applicant’s spending habits and affordability. This means that they will hit capacity based on the number of underwriters they have due to the volume of documents that they need to assess. You need a technological solution to remove some of these simple, time-consuming tasks.
The mortgage distribution process is currently bogged down in archaic administrative processes. Brokers should not be wasting time on menial compliance tasks that can be easily automated. Our aim is to help them invest their time wisely and focus on providing invaluable advice.