Servicing is arguably as important as the mortgage deal itself, but with lenders competing over ever-narrowing margins, it is often the case that service standards will drop a long time before a lender consents to reigning back on its products. And with the massive levels of growth last year, it is no secret many lenders were embarrassed by the dip in their servicing standards.
How often do you open a ‘report and accounts’ document and see those predictable opening words to the effect ‘we aim to be the company of choice through our commitment to quality, value and service.’ Yet often it is well known that the customer service of the organisation is indifferent at best.
While it seems this is becoming endemic in the mortgage industry, it still appears that it takes a lot before brokers will clamour for better service.
Despite the fact that, as a nation we are now far more confident as consumers than our parents’ generation, it does not spread to everything we do. While 30 years ago many people still put up with shoddy standards because they didn’t want to make a fuss, these days we have clear expectations of what is good and, in general, we are not afraid to make a fuss if we do not get it. As a result of this expectation, we see all kinds of businesses making the same solemn promises about service delivery. In a way, claiming ‘we care about service’ is the same as saying ‘I love you’ ‘ it is so easy to trot out the words, but it takes deep commitment over a long period to actually prove it.
For mortgage brokers, empty promises are more than just irritating. They can be downright damaging both to professional credibility and to the bottom line. When a lender makes a commitment to a broker, the broker will then make a commitment to the client. If the deal founders unexpectedly, or the weeks simply drag on, the broker is usually left dealing with the complaints, not the lender. That is why brokers should insist on consistently strong service from lenders, and if they do not get it they should vote with their feet.
Before going any further a definition of exactly what is meant by good service needs to be circumscribed. Some lenders seem to measure it by the technical trickery of the automated ‘robot voice’ answering system that greets your call, whereas others prefer to define it in more human terms. Most brokers would probably rather feel they are dealing with a caring and knowledgeable individual, someone who should do everything to understand the client’s needs, and answering those needs efficiently with all possible urgency. Service providers should only make promises they know they can keep. If all that happens consistently, they will have a happy broker.
Winning the game
It also makes absolute commercial sense for lenders to look after their brokers. As the trainer and author, Dr Tony Alessandra, says: ‘Being on a par in terms of price and quality only gets you into the game. Service wins the game.’ From a lenders point of view, good service not only kindles new relationships with brokers but it also cements those long-term, mutually profitable partnerships.
Brokers know if a lender launches an innovative mortgage product their competitors can copy it in a month. If a lender shifts its rates aggressively, its competitors can follow almost overnight. As a result more lenders are now trying to build a team that consistently delivers demonstrably better service, as real broker loyalty follows.
So if lenders accept that service is at the heart of a broker’s needs, why are so many getting it wrong? What’s stopping them establishing a genuine service culture?
The first and most obvious point is that commitment to service has to begin right at the very top level. Verbose mission statements are not enough ‘ in the boardroom they cannot just talk the talk, they also have to walk the walk. And frankly, not every senior executive in the mortgage industry likes the idea that delivering real service costs real money.
Take individual underwriting. If a lender offers it then it is clear they are prepared to spend money on broker service. In the time it takes for an underwriter to consider one case, someone with no mortgage experience can process a few dozen applications through a credit-scoring system. And, of course, an experienced underwriter costs a lot more to employ than an entry-level employee. But the fact is brokers need that level of individual service. By the nature of the business, mortgage brokers will have a high proportion of clients who are ‘non-standard’ in terms of mortgage applications. They may be self-employed and minimise their income for tax reasons. They could be employed and receive a significant part of their income from bonuses or from a second job. Or they could be successful contract workers who regularly change address.
A lender can spend £10m on a computer system, but in terms of intelligent decision-making, it is still a blunt instrument when it comes to this kind of application. If a lender does not invest to facilitate good, human commercial-risk decisions, perhaps brokers should look elsewhere.
This leads to a broader issue: from a broker’s point of view delivering good service is not necessarily the same as turning over a quick service. Genuinely service-driven lenders can occasionally reach a ceiling on the number of applications they can process with proper care, so they may deliberately put the brake on business volume purely in order to maintain standards.
Most brokers will accept this, provided they are kept properly informed about what they can expect and when ‘don’t promise what you can’t deliver and deliver what you promise’ is a pretty good maxim. Of course not all lenders buy into this ‘volume control’ strategy, but then a lender that takes on more business than its team can handle ends up fire-fighting, providing excuses instead of service, and brokers will soon find out.
In the right place
The next factor in delivering great broker service is that lenders must have the right people in place. By ‘right’ it is meant those people with the best people skills. ‘People skills’ is a well-used phrase but how do you recognise these qualities when you contact a lender? The American academic Daniel Goleman coined the phrase ’emotional intelligence’ to define the personal qualities that set some people apart from their peers ‘ the attributes that help them manage people (and that is what delivering customer service is actually all about).
In other words, people tasked with serving brokers must be able to control their own emotions when dealing with difficult situations (or difficult brokers). They must empathise with the broker’s point of view, anticipate their needs in advance and display a genuine interest in resolving any problems. A lender with people like this on their team is going to offer a high level of individual service.
Even if they manage to attract quality people, however, some lenders still manage to shoot themselves in the foot when it comes to service. Good on-going product training is a case in point. Some lenders do not spend enough on it ‘ or ignore it completely ‘ and then wonder why brokers start to lack confidence in the information they are getting. This in turn damages the self-confidence of service team members and the spiral goes downwards from there.
Lenders must also understand the role of self-esteem in the quality of people’s performance. Anyone who has a pride in themselves and the people around them will have a more positive attitude to the customers they serve. If a lender treats its people like cogs in a wheel, it shows through indifferent service.
Empowerment is another factor in self-esteem. Look for lenders who give their broker-facing team proper responsibility and authority (within realistic limits). You will find enthusiastic individuals who believe in themselves and will care that much more about going the extra mile for you.
In short, search out broker service teams who are well motivated, well trained, confident, empowered and not over-stretched. They will give a broker an outstanding service because they have been given tools to do it. But that can only happen if lenders forget making empty promises and start building a genuine culture of service that runs right from the top down.
The irony is that, as we are all part of the financial services industry, service is literally our middle name. It is just a shame that brokers are not always supported by lenders with the commitment to actually deliver it.
Paul Graham is director of new business at The Mortgage Business
Lenders that are aware of servicing issues may occasionally cut back on business in order to maintain service levels.
A good computer system may be quick, but needs to be backed up by a knowledgeable service team.
Lenders must employ high-calibre staff who are empowered to deal with queries themselves.