That’s what technology does. It makes the unimaginable become an essential part of life and work within years instead of generations.
So, where do you see yourself in five years’ time? Will you be advising your clients in the same way you do today, or will face-to-face appointments be a thing of the past?
Perhaps you’re concerned that technology threatens your role as an adviser, or maybe you think it will improve the way you service your clients.
The march of technology
We are not yet at the stage of a complete online mortgage and purchase process but there have already been significant transformations with more to come.
• Open banking was launched early in 2018 enabling client data to be securely shared with regulated third-party providers. It’s likely to have a huge impact on the mortgage market, as lenders access all of your client’s banking information directly. It will speed up affordability assessments, make them more accurate, and importantly, give lenders access to rich sources of data which can inform pricing and risk strategies in the future.
• APIs (application programming interfaces) are already making a difference – enabling different systems to talk to each other, so you can move from CRM to sourcing to submission seamlessly and without rekeying.
• Many lenders, including Halifax, already accept uploaded documents rather than posted originals.
Ultimately the whole home buying process will be transformed by tech, but this revolution doesn’t necessarily threaten intermediaries. It can certainly make your life easier, if you can use one system, have a clear audit trail and save precious time on re-keying.
Tech allows you to focus on the advice part of the mortgage process, where your expertise and experience can give your client a better service.
But will that element of the process eventually become automated too?
Borrowers can already search for a deal and apply online with some lenders, but only using the non-advised route.
To create an end-to-end process that is completely automated and offers more than a simple decision tree would need artificial intelligence to understand every facet of the borrower’s finances, their attitude to risk, the specifics of their case and the risks to their income.
It might be hard to imagine this type of robo-advice working in practice, but artificial intelligence is improving all the time.
As it stands, it would also require a change in the rules around advice – and this looks more likely following the publication of the regulator’s Mortgages Market Study final report.
The FCA is consulting on specific changes to its advice rules and guidance in the second quarter of 2019.
The regulator noted that ‘some consumers are being channelled unnecessarily into advice’, partly because lenders are not developing online tools to sell mortgages on an execution-only basis ‘to avoid inadvertently breaching our rules’ – i.e. triggering advice requirements.
The FCA stated: “These perceived barriers appear to restrict lenders’ and intermediaries’ ability to innovate to meet consumer demands for information and guidance in a non-advised, digital environment.”
A change in the rules around execution-only and advised sales could clearly have significant consequences for both technological development and for mortgage distribution.
A hybrid advice system is another solution, where an adviser oversees, or checks automated decisions before approving them. This sort of system could in theory be used by intermediaries, as well as lenders. Technology does the grunt work but the adviser acts as the safety net.
The most complex cases will remain difficult to assess automatically, of course, because the more unusual the circumstances, the less relevant data there will be and the more important ‘soft facts’ become, which require the human touch and ‘real life’ experience to deliver a great service.
The same goes for how lenders and intermediaries work together. No matter the technological improvements to processes and systems, intermediaries and lenders still need to converse in real life. BDMs and call centre staff – real human beings – are the oil that keeps the market moving, solving problems, offering guidance when a case isn’t clear cut and supporting your business. And that doesn’t look like changing soon.
At Halifax Intermediaries for example, the commitment to technological investment is clear, with significant developments in the last few years alone, including the lender’s online product transfer.
But the lender understands that customers still want to talk to an adviser, and intermediaries still need to talk to lenders.
That’s why Halifax has almost 40 BDMs on the road, meeting intermediaries face to face. It has also recently boosted the number of its telephone BDMs to provide further support when BDMs are busy at roadshows or workshops.
Well-trained, experienced and reliable professionals who understand intermediaries inside out are invaluable and provide a service that can’t be replicated by technology.
As some elements of the mortgage market become automated, others will remain the domain of experienced mortgage professionals.
Intermediaries are already experts at coping with change, so the best will adapt and thrive.
Get to grips with technology, see how it can help your clients and support your business, and make the changes necessary to offer the best service to your clients.
For the use of mortgage intermediaries and other professionals only
If you do not have professional experience, you should not rely on the information contained in this communication. If you are a professional and you reproduce any part of the information contained in this communication, to be used with or to advise retail clients, you must ensure it conforms to the Financial Conduct Authority’s advising and selling rules. Halifax is a division of Bank of Scotland plc. Registered in Scotland No. SC327000.
Registered Office: The Mound, Edinburgh EH1 1YZ. Bank of Scotland plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 169628. This information is correct as of May 2019 and is relevant to Halifax products and services only.