I read an article recently bemoaning the lack of technology in the mortgage process and questioning why, in this day and age, market practitioners and stakeholders are still using fax machines and sending information by post.
There were some fair points made in the piece – not least the pace that the conveyancing process can proceed at which makes the journey to exchange/completion often seem so arduous – and there’s no doubting that a lot of the work going on at present is all designed to speed up the ‘legals’. However, beating the market with the ‘lack of technology’ stick doesn’t really seem fair, not least because a lot of technology is utilised when going through the mortgage/home-buying process, and of course using technology is not always the safest route anyway.
Ask anyone who has been a victim of identity fraud, or had their emails hacked which resulted in their deposit money being stolen, on whether they see the greater use of technology as a constant positive and I suspect you’ll get something of a different answer. Indeed, I’ve heard conveyancing firms themselves talk about how much safer it might be for clients to utilise ‘snail mail’ as this cuts down on the ability of fraudsters to hack personal details which could be used to illicit money from clients.
So, while of course I am a positive advocate for technology – especially when it can deliver so much time-saving advantages for all stakeholders – we shouldn’t believe that a ‘technology at all costs’ way of doing things is always going to be the best. Indeed, as mentioned above, in some areas it can be a safer path to use the traditional methods albeit with one eye on a safer, more secure, technology solution that could speed up the process.
There is a lot of talk in the market at present about how technology will pave the way for a far more efficient mortgage/home-buying process and I think we should all be excited about Blockchain, digital mortgages, online property log books, central ID verification and the like. However, for advisers there may also need to be a recognition that larger technology firms might view the mortgage advice market as an opportunity to be explored.
For a number of years now we’ve wondered if the likes of Google, Facebook, Amazon, etc, might wish to move into advice areas and the answer has tended to be no. Clearly, there is a risk and a responsibility that comes with this and it means that technology has been primarily focused on providing product information rather than a more overt advice option.
That however might change in the near future, especially when it comes to (what we might term) ‘vanilla mortgages’ which these tech operators might believe can be better delivered through an end-to-end tech solution. The more complex and specialist areas of the mortgage market are likely to be off limits because they require more work, individual understanding and underwriting, and there isn’t necessarily the technology to do this effectively, although of course we should not preclude this from being available in the future.
What we might see therefore is a further split between the mainstream and the specialist, although I would anticipate that more and more clients will be classified as the latter. In a way, and from a technology point of view, we’re already seeing this with ‘robo advice’ propositions being set up and more focused on dealing with ‘vanilla borrowers’. Whether the client themselves wants to go through the whole process via this method is however another point entirely. I’m not convinced they do but if you have something which allows them to start the journey online and then jump off to a human then I suspect you’re covering all bases.
Advisers can’t however legislate for future progress or the financial resources and muscle of a major tech player who wants to truly ‘disrupt’ the market. Look at the change Uber brought about, or indeed Netflix; we cannot think that our market is immune from such an intervention but we can be as prepared as possible, with technology solutions available, to look after those who want to source their mortgage finance in such a way.
The next 10-20 years could herald some major changes to our sector, and while they are unlikely to happen overnight, we can’t think that they won’t happen at all. Keeping one eye on the future, and the march of technology, is therefore vitally important and ensuring you have a flexible and adaptable proposition that can be shifted should it need to respond. Borrowers will continue to need advice but the way they access it might shift – if you can cover all bases you’re likely to be here for the long haul.
Tim Merrey is Head of Software Development at Stonebridge Group