This time last year, the pervading mortgage/technology theme that was being discussed was ‘robo advice’ – how much of a threat it might be for ‘traditional’ brokerages, what it might do to business levels, who would be the winners and losers, and whether it really would fundamentally change the sector.
A year has passed and I get the sense that, while ‘robo advice’ remains a significant part of our sector, it is not viewed with either as much suspicion or fear as it might have been just 12 months ago. Indeed, there have been numerous developments to suggest that, from an advisory point of view, it’s now seen as a part of the overall proposition rather than something that is going to replace it.
Part of this of course is down to the increasing complexity of the mortgage market – that’s not just in terms of client’s wants, needs and circumstances but also in terms of the niche sectors lenders are increasingly moving into, and the sense that a purely ‘robo’ approach is not going to cut the mustard for an increasing number of borrowers. Indeed, this belief appeared to start to crumble around the time that one of the major proponents of ‘robo advice’ revealed their system was not a truly end-to-end one and that they were contacting those who had used it via phone and email to complete the journey.
I think at this point, large numbers of advisers saw that ‘robo advice’ was actually a good thing to offer clients, because it gives them a chance to enter the process as they might wish, but there were always going to be issues with delivery and many people, who would start the process via ‘robo’, actually wanted to speak to a human being who would eventually take them through to completion.
That’s not to say that we won’t see a further drive down the ‘robo’ avenue, but it seems to me that lenders/providers are leading this, particularly those who want to secure larger amounts of product transfer business. Indeed, it might be fair to say, that the ‘robo advice’ threat to advisers doesn’t necessarily come from their peer group but the lender fraternity utilising the tech to secure more business ‘direct’. It’s certainly something to be aware of.
However, 2019’s use of tech – specifically by lenders – appears to also be focusing on how it can be used to cut down on administration (which is good news for advisers) but also how it can evolve the communication channels that exist between lender, adviser and client.
Open Banking, and its uses, has rather limped into existence rather than being delivered with any sort of fanfare but I think we can all expect it to have a far greater impact on our market in the months and years to come. Just recently, M&S Bank announced how it would be utilising Open Banking to allow borrowers to share their ‘proof of income and outgoings’ using these systems, rather than asking them to send in their current account statements.
It says this will speed up the process and there’s a lot to be said to using, for example, APIs to deliver data and information across to various systems rather than using a manual system which involves significant re-keying of data. Of course, having that type of all-encompassing information allows lenders to check affordability rather quickly, if you have a technology system to do this, but again how much it might aid the more complex case is yet to be seen.
As mentioned, lenders are also upping the tech ante to facilitate and enhance communication levels with advisers. Nationwide/TMW recently announced greater tech support on its Broker Chat tool with the aim of providing a greater level of interaction and communication on technical and system support questions. Again, if it saves considerable amounts of time spent waiting on the telephone to secure an answer, then this is clearly a good thing, plus advisers can also use the tool to ask about products, criteria, proc fees, registration and the like. Many advisers will say their major bug-bear is getting through to lenders’ to get their questions’ answered, and anything that can give a much faster response is to be applauded.
So, while 2018 – at least the early parts of the year – might have seemed like the advisory profession was somehow under technological threat, 2019 feels like it has a much more benign and collaborative feel. That’s not to say that firms shouldn’t be aware, and perhaps, wary of what is going on but it also means that the industry is working on providing the tech support and advancement that will aid the intermediary profession, rather than seek to put it out of business.
Tim Merrey is Head of Software Development at Stonebridge Group