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Why fintech is changing the mortgage industry for good – Boyd

by: Ross Boyd is CEO of Dashly
  • 07/06/2021
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It now seems impossible to consider paying an online vendor without using PayPal, or checking our bank balance without using an app. Fintech has empowered people on the hunt for a new loan, a new car insurance policy, or the latest smartphone.

 

Mortgages are no different. According to Infosys, 80 per cent of borrowers want a fully online mortgage application, and mortgage calculators and comparison sites can automate much of the process.

But many customers will be unaware that the best deal on a comparison site may not be the best deal for their specific circumstances. Customers are either overwhelmed with digital information, or apathetic towards new deals because they expect technology to find savings for them automatically.

And just as borrowers have new tools at their disposal, so do property professionals. AI, open banking and front-end fact-finding technology can all help brokers build detailed profiles of customers, and estate agents can use tech to automatically process and store information to match buyers with properties. AI can even underwrite mortgage applications by making real-time decisions, quickly crunching numbers, and eradicating fraudulent activity.

 

Technology combined with human advice

 

Building more accurate profiles of clients using technology means being able to better predict their behaviours. Open banking can show a broker or lender two people who earn the same salary, but who may have radically different spending habits, or even that someone who earns a higher wage isn’t as good a candidate for a mortgage as someone earning less.

So arguably, human advice is more important than ever. In getting to grips with tech, brokers can more easily analyse and compare mortgage rates, thus being able to help their customers find the best deal. Better deals mean more frequent and more meaningful customer interactions, and this contributes to a broker’s bottom line. Symbiosis at its best – broker and buyer in perfect harmony.

In my own organisation, we know that a tailored, properly analysed mortgage deal can only come from a broker with years of experience. Without it, the tech is almost redundant, and it doesn’t serve the ultimate goal of helping people buy their dream home.

Just as QuickBooks and Xero are now ubiquitous in accountancy, brokers are finding that by working with technology, their customers are more satisfied with the new, streamlined mortgage application process – as we know from our successful pilot scheme and now partnership with Paradigm and its members.

 

Fintech is gaining ground

 

And there’s no better time: the market is booming. Brokers will have a backlog of work thanks to the stamp duty holiday, and tech is at the heart of easing the load. We’ll also start to see the personalisation of mortgage products and innovation, with new challenges for the industry such as manufacturing and distributing green mortgages, for example, as the mechanics of the market change.

Although paper-based processes are still very prevalent – despite the pandemic forcing a move to more digital processes – anything that saves customers money and speeds up the lending process can only be a good thing. Fintech, it seems, is here for good.

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