‘We have different assets like the mortgage club, which would fly in a digital world’
In between our interview and the writing of this piece, Legal & General’s fintech business made a £3m minority stake investment in Smartr365, the mortgage client relationship management, sourcing and application submission system.
The investment will be targeted at product development, including enhancements, such as further Application Programming Interface (API) development, after the UK’s biggest lender committed itself to a working integration partnership in March.
Roberts knew the announcement was imminent and is clear that Legal & General is working hard on the partnerships and creative outlook needed to create a ‘frictionless’ mortgage and housing transaction.
He said robo-advice as a concept and the technology involved has always been a distraction from the technology necessary to speed up and connect the housing transaction, the part of the process that takes the longest time by far.
Brokers need to be able to have that ‘golden hour’ to do what they do best and give advice and added: “We are about supporting brokers and supporting advice. The latest Mortgages Market Study confirmed 70-80% of people got the best price on their mortgage.”
Roberts also confirmed a raft of changes and investment in the Mortgage Club team this week with a promotion to lender strategy for Danny Belton, exclusively announced in Mortgage Solutions.
Club director, Kevin Roberts, who joined the distributor from the insurance affinity relationship side at L&G said: “Danny’s promotion is due to the fantastic work he has done for Legal & General Mortgage Club over the years, with nine new lenders joining us alone this year and our panel now totalling 81 providers.”
Belton’s promotion is one of several further investments L&G is making into the Mortgage Club, which is also actively recruiting a head of broker relationships.
The insurance, property and mortgage giant said the head of broker relationships will manage a team of five, including four relationship and development managers and one telephone relationship manager.
GI to mortgage club
Roberts became director of the Legal & General Mortgage Club in March 2018 after five and a half years running the general insurance broker side, then the affinity business programme. Four months into the role, he has had some thinking time and he says it’s about strategic execution and adding value to members.
“GI is ahead of the disruption curve and L&G Mortgage Club wants to come and be a positive disruptor rather than let someone from outside the industry do it.”
If brokers could do anything to future proof their businesses and upskill what would it be? “Concentrate on the advice element,” he said and “focus on where they can add value and embrace that disruption.”
On the potential for big technology giants to enter the market and turn it upside down he says it’s been great talking to these firms.
“It’s helped shape my thinking. I come across a lot of technology, but for brokers, they have unique selling points (USPs) and a deep knowledge – it’s easier to work from our position and add tech on top of that, than start with technology and try to add distribution and knowledge, so therefore it has to be about collaboration for all of us.”
The shape of what’s to come
But doesn’t the greater firepower of a Google or even a Lloyds hand them a natural advantage in a technology arms race?
“Consumers will demand value and the brokers who deliver that will be successful. The lenders that deliver for brokers will be successful. Everyone has to concentrate on delivering that value,” he said.
Legal and General’s strategic digital direction aims to shorten the mortgage journey, create a user-friendly fact find and partnerships which harness information, for example, directly from the passport office.
Roberts suggests all the data from the 100,000 calls a year made to the club on hard to place cases could be harnessed and programmed in to a platform that sources mortgage products on criteria, which lenders could verify and check for accuracy automatically.
He says: “We are looking at all of those constituent parts. We are looking forensically at each one – we’re not going to do it all ourselves and will absolutely collaborate with a number of people and put wrappers around those partnerships to bring people together.”
In response to a question over whether lenders are moving as quickly on mortgage technology as they could be, Roberts says lenders are doing some great things on the technology side. But he says many are waiting to see which technology partners or third-parties will turn out to be the winners in the race to offer an API-driven seamless mortgage submission process.
On who he expects those winners to be, he concludes: “I don’t think there will be one, I don’t think there will be lots. I think a small number of players will emerge…I am excited that L&G is part of that journey to become one of those and more as a facilitator than a competitor I hope.”
Legal & General’s interim results were released today.