Like much of society, the mortgage market has coped with the pandemic by making greater use of technology. Existing trends have been accelerated, while self-confessed ‘digital dinosaurs’ have been forced to emulate their tech-savvy peers, transforming the industry in the process
in association with
All hands on tech
By Emma Simon
‘Lenders switched to automated valuations where risk and insurances allowed. This meant some transactions were able to continue’
The mortgage market has faced significant upheaval amid the coronavirus pandemic and accompanying physical and economic lockdowns.
For lenders and brokers the challenges have been immense. The house purchase market initially ground to a halt, with the first lockdown making viewings and valuations impossible.
At the same time, however, lenders and brokers — working remotely, often with reduced staff — had to ensure services were maintained for existing customers looking to remortgage, while also helping millions of borrowers in financial difficulty to arrange payment deferrals or new mortgage terms.
This situation was followed by a resurgent housing market over the summer as potential buyers looked to make the most of the chancellor’s stamp duty ‘holiday’.
Throughout this period, effective technology solutions have been key to ensuring both mortgage and re-mortgage deals can be processed and service standards maintained — between lenders and brokers as well as broker and clients.
All hands
on tech
What does
the future hold?
head of sales
HSBC UK Intermediary Mortgages
Richard Beardshaw
© Metropolis Financial Platforms Ltd 2020. ALL RIGHTS RESERVED
In association with
Click here for disclaimer
In many ways the Covid crisis has accelerated a number of existing trends in the market, including the switch towards more automated services in recent years.
SPF Private Clients chief executive Mark Harris says lenders introduced a number of technology solutions early in the pandemic to alleviate some of the most pressing problems they faced. These included pro-cessing mortgage payment deferrals and dealing with the lockdown of surveyors.
He says: “Lenders were always able to receive documentation electronically, but like most things there was always the need for human intervention at some point; for example, obtaining a signed document.
“Some lenders removed this as a necessity by allowing electronic signatures and permitting borrowers to submit photographs of supporting evidence. Lenders also switched to automated valuations where risk and insurances allowed. This meant some transactions were able to continue.”
These automated valuations have continued to be used alongside physical valuations as different regions relaxed and then reimposed lockdown regulations.
Harris says there has been an increased adoption of technology across all aspects of the recommendation process. This includes data gathering, ID verification, electronic submission and receipt of documentation, product listing services, criteria tools and affordability tools, right through to submission.
These services have typically been made available online, so they can be accessed by brokers whether in the office or working from home.
Existing trends
‘Increased Live Chat capacity was a very welcome digital solution to an ongoing issue’
Increased capacity
Lenders have also increased the capacity of some of the services they offer brokers, such as the Live Chat function on certain systems. This allows advisers and support staff to engage with lenders in real time, to ask questions and get up-to-date information on existing business or new cases.
HSBC UK, for example, says it has had more than 35,000 conversations with brokers using Live Chat.
HSBC UK head of sales, mortgage intermediaries Richard Beardshaw says: “Feedback from brokers tells us this was a very welcome digital solution to an ongoing issue. This was in addition to answering 240,000 calls during this time.”
Like other lenders, HSBC UK has focused on a range of operational issues to try to ensure a ‘business as usual’ service for intermediaries. But it has also expanded its intermediary channel.
Beardshaw says: “Work also continued to onboard broker firms, giving more people access to our products. Since [the first] lockdown we have increased the number of firms with access to our mortgages by almost a third.”
Lockdown also presented a communications challenge for lenders in terms of letting brokers know about a range of issues, from rate and criteria changes to information on how they were dealing with furloughed applicants.
Brokers say mortgage networks, as well as providers such as Criteria Hub, Knowledge Bank and Mortgage Brain, have stepped up to bridge this gap. It has been no mean feat; Knowledge Bank recently reported there had been more than 20,000 criteria changes in the past eight months, with these relating just to residential mortgages.
Knowledge Bank chief executive and founder Nicola Firth says: “The team here initially worked through the night to build a free-to-use Covid-19 Criteria Live Feed. This allowed brokers to access information on what each lender’s policy and process were for requesting a payment holiday.”
She adds: “This was done to lessen the impact on lenders by holding all the information in one place. As more Covid-specific criteria came into force, they were added to this live feed so brokers could keep on top of changes.
“This included lending for furloughed workers, self-employed support schemes, product transfers while in a payment holiday, and the temporary LTV restrictions introduced by some lenders to facilitate desktop valuations.”
Long-term benefits
Many in the industry believe this push towards greater automation should deliver long-term benefits, ensur-ing greater efficiencies.
L&C Mortgages associate director David Hollingworth says: “Technology is clearly going to be at the heart of facilitating change in the mortgage market.
“The fact that there remains a good deal of duplication in the mortgage process in re-keying information from one system into another is a clear example of how things could be improved by better technology in-tegration.
“This could stem from broker systems being embedded into lender applications and there are hopes that this will be much improved as lender API integrations gain momentum.”
Technology has changed not just the way brokers interact with lenders but how they deal with clients. In some cases, this has led to quicker and easier-to-use services.
Hollingworth says: “Our online mortgage finder has certainly been helpful in enabling customers to interact with us and complete their enquiries online.
“Customers like being able to complete their details online in their own time, which can help improve effi-ciencies for advisers and brokers alike.”
Other brokers, however, point out that technology solutions can have their limitations. Mortgage adviser Jay Lee, who recently set up his own training business for brokers, uAcademy, says: “The mortgage indus-try has been heavily reliant on face-to-face transactions, but the pandemic has changed the way most of us work.
‘The team worked through the night to build a free-to-use Covid-19 Criteria Live Feed’
“Communication with clients face to face allows brokers to judge body language and get a sense of how the client feels about a particular product, service or general advice.”
This is difficult to replicate via phone or text; and, while video-conferencing services such as Zoom and Microsoft Teams have been beneficial, Lee says they do not fully match the experience of being face to face with a client.
“It’s a different kind of meeting and brokers have had to adapt their communication skills accordingly.”
Lee points out that there have also been security issues with some of these services, which brokers have had to address.
However, many in the industry believe that, as more people get accustomed to using such services, these will be employed alongside more traditional, face-to-face meetings in a post-Covid environment.
It is said that necessity is the mother of invention. The Covid crisis has caused the industry to embrace a new range of digital and automated solutions, which should mean advisers can offer a more flexible range of products and services to suit different clients’ needs.
chapter 1
chapter 2
Q&A
Home