The lack of innovation is likely down to the rising issue of brokers becoming data prisoners to their technology platforms.
This happens when technology providers hold brokers prisoner through complex methods of storing data and prohibitive contracts remove the ability to switch to a better platform or deal.
How does this happen?
There are two ways brokers can find themselves as a data prisoner. The first and most common is through mandated contracts.
Many networks push brokers to use certain technology platforms. Platforms winning new business and retaining clients in this way have no need to grow and improve. This hinders competition and eliminates the need for meaningful development.
Additionally, contracts can trap users as data prisoners through rolling agreements and confusing break clauses.
It is now commonplace for brokers to be tied into three-year rolling deals which renew automatically if not explicitly terminated, or for firms to charge impossibly high fees for ending their agreements.
In other instances, some platforms make it challenging for the broker to switch due to the data retrieval methods offered.
There may be no consistency in the format that client data is shared with the broker which makes it difficult, if not impossible, to mass migrate to another platform.
This ties the business to the platform unless they have the time and resources to migrate all data manually.
Brokers mandated to stay put can also find further problems down the line.
Some technology platforms charge fees for data storage over a certain allowance, or for onboarding new users.
This is essentially a tax on success, putting a fee on expanding teams or growing offerings, and ties brokers into expensive, outdated platforms indefinitely.
A barrier to success
It is these practices which stunt competition. Brokers stuck with outdated systems are unable to provide the best service to their clients and compete within their own market.
Additionally, this stunted development opens our industry up to potential Uberisation.
The national lockdown in March presented a prime opportunity for technology development in the mortgage market, and many stepped up.
As a result, consumers now expect more from their brokers in terms of a streamlined, remote mortgage application executed through technology.
We need to harness this innovation. We’ve seen a significant uptake of technology over 2020 and many brokers are now able to offer clients online fact finds, digital ID verification and seamless integrations between stakeholders.
Unfortunately, there are still brokers tied down with outdated technology unable to deliver to the required standard, but it is great to see change on the peripheral.
A moral obligation
We all have a part to play in the change our industry needs.
In the short term, networks need to give members the freedom to choose the right platform for them and brokers must be aware of the issues.
The repercussions could lead to being stuck with outdated technology, a tax on your growth, and, ultimately, the loss of clients.
On a longer basis, we need to work together to create a market which supports development and pushes the big players to invest in change.