But could an online portal truly be a solid substitute for borrowers who don’t want to sit through a two hour interview and could it ever be used effectively to offer advice?
This week we ask our Marketwatch experts to consider the validity of choosing a mortgage online.
Marc Page, customer management director at Lloyds Bank, said the online route will become the preferred option for customers with simple transactions while buying a home online may be still some way off
Henry Woodcock, principle mortgage consultant at IRESS, said the UK was lagging behind other countries in its use of online portals but he expected this channel to take off in the next two years
Rob Clifford, is chief executive of If I Were You and group commercial director at Shepherd Direct Group, thinks the internet is miles away from being able to provide serve the needs of the mass market
Marc Page, customer management director at Lloyds Bank
People increasingly expect a digital option in everything they do, and selecting banking products is no different.
There is growing demand for online mortgages as more and more people who look to the online channel for information are going further and trusting it to complete transactions.
Those people, especially in the post MMR world, who want to make simple transactions may find that an advised process is too time consuming.
I predict that in five years time self service will be as popular for mortgages as other banking products but buying will still be dominated by face-to-face interactions with specialists.
As digital integration continues it’s most likely that we will see developments so that parts of the buying process will be online to save customers time.
This will allow shorter interview times which then allow the focus to be on the real added value part of the conversation – the advice.
Customers will only be willing to buy online if they feel confident to do so. Mortgage providers need to simplify their product offering to make mortgages easy to distinguish and therefore simpler to choose from for customers.
Having a complex range of products will put customers off unless you can help get it down to a handful of appropriate options very quickly with the right customer friendly tools.
If customers have a good experience first time they will continue to go back to managing their mortgage online due to its convenience.
Ensuring a good customer experience is therefore critical.
Henry Woodcock, principle mortgage consultant, IRESS
There is no doubt that online mortgage applications will increase as a channel of choice for the savvy applicant over the next two years.
Orchestrating all the data, processes and services to enable joined up distribution across devices is very close for a consumer execution-only sale.
The journey for advised sales is however, more challenging, balancing compliance and supporting the adviser.
The introduction of MMR and lengthy interview times as well as disjointed processes are a challenge, especially in the short term as lenders adjust.
Technology can help with this and customers will benefit from the improved speed and efficiency in the sales process it can deliver.
If you look at other mortgage markets around the world, digital as a distribution channel has already taken off in many countries.
In the US more than 10% of transactions are now via digital and in South Africa some lenders are seeing 20% to 25% of their business in digital channels.
Intermediaries can also benefit from enhanced online sales portals. Lenders are extending the types of transactions they offer to include post contract variations and porting, which in turn reduces pressures lenders are experiencing in the direct channels.
Those successfully operating in the mortgage market of tomorrow will seamlessly join up the process of securing a home and mortgage product – across any channel.
Rob Clifford is chief executive of If I Were You and group commercial director at Shepherd Direct Group
The internet plays a vital part in the mortgage market with yet more clients using comparison sites such as Compare the Market in their quest for the most attractive deal available.
But the internet is miles away from providing the mass market with a complete online service that truly gives the client complete choice and reassurance.
The substantial share of the market which intermediaries originate tells us loudly that most consumers don’t want to self-select, they want proper expertise.
MMR may cause some frustration here as even more consumers find that they can’t buy a mortgage direct from lenders as simply as they once could which potentially drives even more to intermediaries.
It is logical to assume that borrowers, once decided on taking professional advice, would feel more comfortable seeing the whites of the eyes of their adviser, to make the interaction even more personal.
Whilst live chat, video conferencing and screen sharing technology already facilitate remote advice our market testing tells us that the vast majority of consumers are not excited about a live online service just yet.
It’s inevitable that the market will deliver more online advice propositions given the rapid progression of technology.
But for the mass market, those seeking help and advice still want to hear a voice of reassurance and be told by an experienced professional that they are making the right choice.
