I was fascinated to hear from a few lenders who fed back to us during the lockdown, that having implemented technology solutions for customers applying for mortgage payment holidays, they were still inundated by customers wanting to ‘talk it through’ with a real person before they went online.
This highlights something still very human about…human behaviour.
Over the last few years the team at Alexander Hall have met many technology providers, read countless articles and listened to many speakers at seminars.
The mantra which underpins them all is the insistence that if you do not ‘embrace technology’, you’ll be ‘Uber-ized’.
The embracing technology mantra is unhelpful due to its lack of specificity.
It bashes you over the head with the what, without much insight into the how or the why.
Broadly speaking the ability to embrace technology is not binary, the endeavour is wide-ranging and nuanced.
Navigating suitable offerings
The biggest challenge for the small to medium sized mortgage intermediary like Alexander Hall isn’t a lack of gumption to embrace technology to improve productivity, accuracy and customer service.
Or a lack of gumption to fend off the challenge to market share from new tech focussed incumbents. In fact we welcome the new ideas these businesses bring into the ecosystem.
Instead the biggest challenge is navigating the array of third party options and determining which of them has a usable product, has the formal support of the lenders, and has the appetite to work in a partnership.
Also, the better offerings provide well thought through solutions to the complex needs of the mortgage adviser. And they enhance the human-led adviser experience at a workable price.
The not so attractive offerings often provide unclear solutions to problems which do not exist, and at a cost aligned with the needs of the provider and not the recipient.
Some also make the mortgage adviser secondary to the technology.
Loss-making business model
Finally my assessment of the technology landscape wouldn’t be complete without mentioning the numbers.
The business models of the new incumbents are generally yet to prove they have the potential to be commercially viable.
Endlessly pumping money into a business, which fails to break even feels more like a charity dependant on donations.
It’s difficult to hear that we’ll be put out of business by firms yet to turn a profit. I hope, if or rather when the music stops, consumers are not the ones put at risk.
The critical mass of traditional mortgage advisers have done an excellent job serving a mortgage market through really difficult times.
It’s important we re-balance the technology conversation to fairly represent and refute the claims we are past our sell by date.
The reality is, we typically run profitable, sustainable, compliant businesses with the senior level experience and passion to adapt and upgrade.
Brokers driving change
I’ve been proud to be part of a traditional intermediary sector with hundreds of other businesses who have supported lenders during their operational challenges and supported customers who have relied on advice delivered by seasoned professionals more than ever.
This has been reflected in the Intermediary Mortgage Lenders Association (IMLA) data where the intermediary market share has increased from 77 per cent to 85 per cent.
It is important we do not allow our voices to be labelled as insignificant and our businesses earmarked as collateral damage to a new technology dawn.
We will not be the victims of change, but instead we will be the drivers of change – without the fuss and without the fanfare.
You can read the first part of Dominic Scott’s look at mortgage advice technology here.