The four areas I think provide the biggest opportunities are:
1. Delivery of non-product outcomes:
Looking beyond the product and asking ourselves what non-financial outcome the customer is striving for. What are they trying to achieve? What’s the plan? What’s the timeline? What’s my role in that process as an adviser or lender?
How do I create products and services that enable the non- product outcome to be achieved? Ultimately, the firms that best understand their target markets and can work with them to deliver their life goals will differentiate themselves from those who are still just selling products.
2. Life events:
The firms that support the borrower and their family through the tough times will have an opportunity to create a brand loyalty that is hard to shake.
We focus much of our thinking and propositional work on acquisition. However, if a firm is able to demonstrate a different approach during difficult times and help consumers avoid the sometimes catastrophic impact of life events, then increased loyalty may well be the reward.
That might mean lenders giving advisers more access to features that can help borrowers in difficulty, for example, a six to 12 month payment holiday if a borrower suffers bereavement, rate reductions if they are ill, turning payments off completely if the illness is terminal.
Advice will undoubtedly increase the chances of customers achieving a good outcome. Using that skill set as much as possible and giving advisers additional tools to help mitigate harms would seem a sensible lender approach.
3. Flexibility:
It’s an obvious one but flexibility in a product or proposition is going to be absolutely key if we want to ensure products stay relevant throughout a lifecycle. This might mean lenders adding more features and allowing the borrower or adviser to have more control over how the product operates but it could also mean removing barriers to exit, such as the removal of early repayment charges (ERC) completely or the end of using standard variable rate (SVR) as a revert rate?
4. Advice:
Whether it be technology-enabled – such as tech assisting humans not replacing them – or the good old-fashioned variety, advice increases the chances of a good outcome. I’ve long advocated for holistic advice and the benefits that it could deliver. That doesn’t just mean in the later life market but also in terms of protection and holistic retirement advice simultaneous investment and mortgage as well.
If advice, flexibility and more product features give us greater certainty of a good outcome, then lenders and product providers in all markets should be more confident in creating products that can meet more complex needs.
If that’s the case and we can help more people achieve good outcomes then that can only be a good thing for customers, advisers, the market and society as a whole.
