Cathy McPherson is Group Sales Director at On The Money
The UK property sector has been notoriously slow when it comes to embracing change. This is certainly the case with the mortgage market.
For many years, mortgage lenders and brokers have been able to meet borrower demands using outdated practices and processes. However, such complacency has now been exposed as a serious problem.
Back to basics – why don’t all lenders do desktop appraisals or AVMs?
In recent years, advancements in next-generation technology have had a profound impact on how consumers can interact with businesses. Especially in the financial services industry, online applications and platforms have revolutionized the way consumers do business. At the same time, they improve transparency and allow companies to interact reactively with their customers.
Adapt to new circumstances
The coronavirus pandemic has accelerated this trend. Indeed, in many cases, it has transformed the way businesses operate.
When social isolation measures were first introduced in March, it was surprising how many organizations were just not ready to adapt to the changing circumstances.
This was particularly evident to some lenders and mortgage brokers whose use of archaic processes made it difficult for them to transition to remote work, where technology has become essential.
Positively, however, having turned to technology to overcome the immediate challenges posed by foreclosure, brokers are now seeing how accessible and easy to use these solutions are.
Now the government has started to slowly ease the lockdown measures; the real estate market is one of the beneficiaries of this decision. But it is wrong to assume that things will go back to where they were at the start of the year. In fact, things might never get back to what we considered “normal” before the lockdown.
I think COVID-19 is triggering a technological transformation of players in the real estate market. This makes sense given that there are now platforms designed to meet the needs of brokers and intermediaries, ensuring that they can provide a fast and efficient service.
Over the next few months, the rapid adoption of next-generation technology is likely to change the way brokers engage with lenders and clients; Here’s how.
One of the biggest challenges mortgage brokers face is managing and advancing separate conversations in order to complete an investigation. It can be a complicated process.
Today, the majority of brokers rely on emails and phone calls when dealing with lenders and their clients (or potential clients). While there is nothing inherently wrong with this approach,
it can be difficult to stay on top of multiple conversations while making sure regular updates are provided to the customer.
Online platforms are changing all that by providing one place where brokers can manage all of their conversations. Brokers can send emails, record calls, and keep recorded records for each case through one platform.
At the same time, these platforms provide brokers with direct access to third parties with whom they need to communicate as part of the investigation process, including the HMRC and the Office for National Statistics. In short, these technology platforms dramatically improve transparency and communication.
Use AI to create risk profiles
Artificial intelligence (AI) plays a much bigger role in many industries, but few people fully understand the benefits it provides. It is worth exploring this in the mortgage industry.
AI is naturally positioned to process reams of data in seconds. It can extract numbers, identify outliers, map common trends and produce analytical reports, helping to inform bigger decisions.
For brokers, AI can be leveraged to create detailed risk profiles of their clients in seconds by reviewing relevant documents and quickly determining which products would be best suited for each client.
Interestingly, AI’s ability to report on risk isn’t limited to analyzing quantitative data. Additionally, advances in machine learning (ML) mean that AI can help create a digital footprint of individual customers based on their online activities. While this is still under development, it will ensure that brokers have access to a complete profile of every client they engage with.
Customized services and products
Finally, and perhaps most obvious, next-generation platforms designed specifically for brokers ensure they have easy access to hundreds, if not thousands, of mortgage products and services.
This means that instead of manually contacting each lender, brokers can use the platform to quickly browse the different products available.
Plus, after establishing the needs of a particular survey, brokers can quickly filter out irrelevant products and find the ones that best meet their clients’ needs. It may not sound revolutionary.
However, the reality is that many brokers still rely on manual communication with individual lenders. This is a time consuming process and means they risk not investigating the full range of products that are relevant to their customers.
The examples above show how technology – from AI to online communication platforms – is virtually changing the way brokers and intermediaries operate. The immediate hurdles posed by COVID-19 have demonstrated the practical benefits of such technology, and over the coming months we will likely see more brokers taking advantage of these next-generation platforms.
There’s little reason not to: They improve communication, automate tedious and repetitive processes, and give brokers the tools to act faster. Additionally, brokers who remain complacent risk being overtaken by competitors who readily adopt the technology and take full advantage of the benefits it has to offer. Now is the time to adapt and transform outdated and archaic processes.