In some instances, we’re still using technology from the 1980s and 1990s in 2022 – surely, it’s past time to address this? 

Updating our technology is key to maximising the later life lending sector’s opportunities – and there is plenty of opportunity. In the UK, the over-65s are the fastest-growing demographic, with their numbers projected to increase by 7.5 million over the next half-century – roughly a quarter of the population, according to the Office for National Statistics (ONS).   

And while various pundits disagree as to the exact figure, the fact this demographic holds substantial housing wealth which is in the trillions is generally agreed. 

 

A small section of the market 

Yet, when you consider the entire residential mortgage market, the £150bn later life lending market seems tiny to say the least. Within this market, there are also distinctions and while we are obviously delighted that the equity release market is on track to see £6bn worth of sales in 2022 and retirement interest-only mortgages are close if not over the triple digit sales barrier, there should be far more scope for these products to provide good customer outcomes. 

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Now we know that to help this market reach its full potential, we need to see change and it is worth acknowledging that more focus needs to be put into education to win the hearts and minds of customers as well as the wider adviser community.   

But these are not the only barriers we need to tackle and we need to consider the role technology can play. 

  

Updating technology 

Too many systems make life needlessly difficult and slow for both customers and advisers; too much of the process is manual and paper-based; and too often, we complicate what is already a complex area for many. In an age of apps and application programming interfaces (APIs), I know there are still some fax machines in use.   

Of course, we need to be careful and keep in mind the customers; online-only apps for first-time buyers won’t always be suitable for an older client base. The human touch remains crucial for of all ages – especially if the case is more complex.  

But we are dealing with a generation that includes the ‘silver surfers’ who are entirely comfortable banking on their phones and – as with the rest of us – don’t want needless delays and cumbersome processes.  

Technology like automated updates can also improve the customer experience with instant announcements on market changes while also helping advisers comply with customer-centric regulatory requirements under the new Consumer Duty. 

  

Engaging with digitalisation 

We need to engage with new technology to make the later-life lending market more accessible. The range of technology and applications varies widely, from marketing to acquisition and processing, but two aspects are worth particular attention. 

Firstly, greater automation and integration of systems between advisers, distributors and lenders could significantly accelerate the underwriting process. That could lead to substantial time savings for customers and advisers, as well as significant administrative efficiencies.  

Integration of systems using APIs could save advisers time on data entry, reduce errors and provide a more secure solution to sharing personal data than email.  

Second, better sourcing systems could help break down silos between equity release, retirement interest-only, later life mortgages and other appropriate products. Providing this type of holistic view of the market will ultimately ensure better outcomes as even the most diligent adviser is going to find juggling different systems for different products with different criteria tough. 

Crucially, though, it’s not just up to advisers. They have enough on their plates without trying to become tech wizards.  

That’s why distribution partners need to step up and offer them support with simple, comprehensive technology packages. If we’re going to make the most of opportunities in the later life lending sector, and support our clients with the best possible outcomes, we’re all going to need to work together.