In the last issue of Mortgage Solutions, a number of questions were posed to readers designed to ascertain how advisers view technology: whether it is a help or a hindrance, and whether claims made by lenders can be substantiated? This research has been combined with an exclusive broker survey carried out by all-status lender, GMAC-RFC, to give a clear overview of where the sector is in regards to technology at the start of 2003.
In answer to the question, ‘what do you think online applications will mean for the packaging industry?’ 66% thought it would be of benefit, with just 33% highlighting potential problems.
David Hollingworth, mortgage specialist at London & Country, is one who thinks it has the potential to be a positive development for packagers: ‘If brokers are online they can form an easy link to lenders which gives them a direct relationship with the lender. But there is nothing to stop packagers developing an online proposition and continuing to interface with lenders this way too. If a broker uses a packager now, then they may still use them when applications are sent online.’
Rob Clifford, managing director of mortgageforce, agrees: ‘The functions performed by packagers will continue to be necessary. Many lenders have made it clear they want to outsource this process. The packager has to be sure it is not ‘elongating’ the process. It must offer tangible added value and a technology platform at least as good, if not better, than the lenders.’
The second question asked whether brokers really wanted or even needed fully integrated systems that will allow them to send applications straight through to lenders. Unsurprisingly, 100% of respondents said brokers would benefit from online applications.
Commenting, Ray Boulger, senior technical manager at Charcol, says: ‘We already do full online applications with some lenders. The benefits are that the client gets an immediate response, but the broker is saving time and money so all parties benefit. However, when a client is completing an application in the office the broker has to choose which format to use, paper or online. If it is a black and white case they can get an instant decision, but if it is complex the adviser needs to talk to the lender anyway.’
However, Clifford points out other factors may be as important to success. ‘A broker lives and dies on his service levels. Clients do not expect advisers to delay the process, so while e-trading is an advantage its not essential. The application process worked well in the past.’
The third question asked whether we are reaching a situation where brokers have too many passwords, and if technology turning into a hindrance?
Around 70% of advisers claimed there is a danger of password fatigue. Boulger says: ‘It can be a problem. I am not sure how many sites allow brokers to enter their own password and how many give you one when you register. Choosing your own would help and if not, then I would be less likely to use it.’
But Hollingworth has little sympathy for brokers who complain and yet still expect to prosper in the future. He says: ‘Passwords are a straightforward administration issue. The benefits of e-business far outweigh the problems such as remembering a lot of passwords. Advisers should be able to come up with their own solutions.’
The final question sought to find out whether advisers think lenders are as technologically advanced as they claim. Only 25% thought lenders can deliver all the technological solutions they claim, with most believing there is a degree of smoke and mirrors with many claims. Hollingworth says: ‘On one hand we are seeing the next steps; with more lenders online, the whole application process can be conducted at the click of a button. But there are still lenders that charge annual interest claiming they cannot transfer borrowers over to daily interest because of ‘service issues’ so there is room for improvement.’
Clifford agrees: ‘Even if lenders are accepting what is essentially an email it is still advantageous from the broker’s perspective as it is a paperless solution for them. Most lenders have legacy systems which means it will take time and money to be able to convert them to fully accepting online applications.’
The results reveal a healthy scepticism among brokers, and the technology purported by lenders to cause a sea change in business transactions is not there yet. However, in a bid to find out how often advisers are using technology, Mortgage Solutions teamed up with GMAC-RFC to survey its regular introducers and discover how brokers find technology has altered the way they do business.
Ben Marquand is editor